FIDELITY MASSACHUSETTS MUNICIPAL TRUST, 485APOS, 2000-01-18

FIDELITY MASSACHUSETTS MUNICIPAL TRUST
485APOS, 2000-01-18

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT No. 2-75537
UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 38 [X]

and

REGISTRATION STATEMENT No. 811-3361
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 38 [X]

Fidelity Massachusetts Municipal Trust
(Exact Name of Registrant as Specified in Charter)

82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number: 617-563-7000

Eric D. Roiter, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)

It is proposed that this filing will become effective

( ) immediately upon filing pursuant to paragraph (b).
( ) on ( ) pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
(X) on March 25, 2000 pursuant to paragraph (a)(1) of Rule 485.
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

( ) this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.

Like securities of all mutual
funds, these securities have
not been approved or
disapproved by the
Securities and Exchange
Commission, and the
Securities and Exchange
Commission has not
determined if this
prospectus is accurate or
complete. Any
representation to the
contrary is a criminal
offense.

FIDELITY'S
MASSACHUSETTS MUNICIPAL
FUNDS

SPARTAN(registered trademark) MASSACHUSETTS MUNICIPAL MONEY MARKET
FUND (fund number 426, trading symbol FMSX)

FIDELITY MASSACHUSETTS MUNICIPAL MONEY MARKET FUND (fund number 074,
trading symbol FDMXX)

SPARTAN MASSACHUSETTS MUNICIPAL INCOME FUND (fund number 070, trading
symbol FDMMX)

PROSPECTUS
MARCH 25 , 1999

(fidelity_logo_graphic)(registered trademark)
82 Devonshire Street, Boston, MA 02109

CONTENTS

FUND SUMMARY INVESTMENT SUMMARY

4 PERFORMANCE

6 FEE TABLE

FUND BASICS 8 INVESTMENT DETAILS

10 VALUING SHARES

SHAREHOLDER INFORMATION 10 BUYING AND SELLING SHARES

18 EXCHANGING SHARES

18 ACCOUNT FEATURES AND POLICIES

21 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS

22 TAX CONSEQUENCES

FUND SERVICES 22 FUND MANAGEMENT

23 FUND DISTRIBUTION

APPENDIX 23 FINANCIAL HIGHLIGHTS

FUND SUMMARY

INVESTMENT SUMMARY

INVESTMENT OBJECTIVE

MASSACHUSETTS MUNICIPAL MONEY MARKET FUND seeks as high a level of
current income, exempt from federal income tax and Massachusetts
personal income tax, as is consistent with preservation of
capital.

PRINCIPAL INVESTMENT STRATEGIES

Fidelity Management & Research Company (FMR)'s principal investment
strategies include:

(small solid bullet) Normally investing in municipal money
market securities, including shares of a municipal money market fund
managed by an affiliate of FMR.

(small solid bullet) Normally investing at least 65% of total
assets in municipal securities whose interest is exempt from
Massachusetts personal income tax.

(small solid bullet) Normally investing at least 80% of assets in
municipal securities whose interest is exempt from federal income
tax.

(small solid bullet) Potentially investing more than 25% of total
assets in municipal securities that finance similar types of projects.

(small solid bullet) Investing in compliance with industry-standard
requirements for money market funds for the quality, maturity and
diversification of investments.

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

(small solid bullet) MUNICIPAL MARKET VOLATILITY. The municipal market
is volatile and can be significantly affected by adverse tax,
legislative or political changes and the financial condition of the
issuers of municipal securities.

(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a money market security to decrease.

(small solid bullet) FOREIGN EXPOSURE. Entities located in foreign
countries can be affected by adverse political, regulatory, market or
economic developments in those countries.

(small solid bullet) GEOGRAPHIC CONCENTRATION. Unfavorable political
or economic conditions within Massachusetts can affect the credit
quality of issuers located in that state.

(small solid bullet) ISSUER-SPECIFIC CHANGES. A decline in the credit
quality of an issuer or the provider of credit support or a
maturity-shortening structure for a security can cause the price of a
money market security to decrease.

An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency. Although the fund seeks to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in the fund.

INVESTMENT OBJECTIVE

SPARTAN MASSACHUSETTS MUNICIPAL MONEY MARKET FUND seeks as high
a level of income, exempt from federal and Massachusetts personal
income tax, as is consistent with the preservation of capital and
liquidity.

PRINCIPAL INVESTMENT STRATEGIES

FMR' s principal investment strategies include:

(small solid bullet) Normally investing in municipal money
market securities, including shares of a municipal money market fund
managed by an affiliate of FMR.

(small solid bullet) Normally investing at least 65% of total
assets in municipal securities whose interest is exempt from
Massachusetts personal income tax.

(small solid bullet) Normally investing at least 80% of assets in
municipal securities whose interest is exempt from federal income
tax.

(small solid bullet) Potentially investing more than 25% of total
assets in municipal securities that finance similar types of projects.

(small solid bullet) Investing in compliance with industry-standard
requirements for money market funds for the quality, maturity and
diversification of investments.

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a money market security to decrease.

(small solid bullet) FOREIGN EXPOSURE. Entities located in foreign
countries can be affected by adverse political, regulatory, market or
economic developments in those countries.

(small solid bullet) GEOGRAPHIC CONCENTRATION. Unfavorable political
or economic conditions within Massachusetts can affect the credit
quality of issuers located in that state.

INVESTMENT OBJECTIVE

SPARTAN MASSACHUSETTS MUNICIPAL INCOME FUND seeks a high
level of current income, exempt from federal income tax and
Massachusetts personal income tax.

PRINCIPAL INVESTMENT STRATEGIES

FMR' s principal investment strategies include:

(small solid bullet) Normally investing in investment-grade
municipal debt securities (those of medium and high quality).

(small solid bullet) Normally investing at least 80% of assets in
municipal securities whose interest is exempt from federal and
Massachusetts personal income taxes.

(small solid bullet) Potentially investing more than 25% of total
assets in municipal securities that finance similar types of projects.

(small solid bullet) Managing the fund to have similar overall
interest rate risk to the Lehman Brothers Massachusetts Enhanced
Municipal Bond Index.

(small solid bullet) Allocating assets across different market sectors
and maturities.

(small solid bullet) Analyzing a security's structural features and
current pricing , trading opportunities, and the credit
quality of its issuer to select investments.

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a debt security to decrease.

(small solid bullet) GEOGRAPHIC CONCENTRATION. Unfavorable political
or economic conditions within Massachusetts can affect the credit
quality of issuers located in that state.

(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently
from the value of the market as a whole.

In addition, the fund is considered non-diversified and can invest a
greater portion of assets in securities of individual issuers than a
diversified fund. As a result, changes in the market value of a single
issuer could cause greater fluctuations in share price than would
occur in a more diversified fund.

An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.

When you sell your shares of the fund, they could be worth more or
less than what you paid for them.

PERFORMANCE

The following information illustrates the changes in each fund's
performance from year to year and compares the bond fund's
performance to the performance of a market index and an average
of the performance of similar funds over various periods of time.
Spartan Massachusetts Municipal Income also compares its
performance to the performance of an additional index over various
periods of time. Data for the additional index for Spartan
Massachusetts Municipal Income is available only from June 30, 1993 to
the present. Returns are based on past results and are not an
indication of future performance.

YEAR-BY-YEAR RETURNS

The returns in the chart do not include the effect of Spartan
Massachusetts Municipal Money Market's account closeout fee. If the
effect of the fee were reflected, returns would be lower than
those shown.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SPARTAN MA MUNICIPAL MONEY
MARKET

Calendar Years 1992 1993 1994 1995 1996 1997 1998 1999

% % % % % % % %

</TABLE>

Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: nil
Row: 10, Col: 1, Value: nil

DURING THE PERIODS SHOWN IN THE CHART FOR SPARTAN MASSACHUSETTS
MUNICIPAL MONEY MARKET, THE HIGHEST RETURN FOR A QUARTER WAS __%
(QUARTER ENDED _______) AND THE LOWEST RETURN FOR A QUARTER WAS
__% (QUARTER ENDED _______) .

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MA MUNICIPAL MONEY MARKET

Calendar Years 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

% % % % % % % % % %

</TABLE>

DURING THE PERIODS SHOWN IN THE CHART FOR MASSACHUSETTS MUNICIPAL
MONEY MARKET, THE HIGHEST RETURN FOR A QUARTER WAS __% (QUARTER
E NDED _______) AND THE LOWEST RETURN FOR A QUARTER WAS __%
(QUARTER ENDED _______).

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SPARTAN MA MUNICIPAL INCOME

Calendar Years 1992 1993 1994 1995 1996 1997 1998 1999

% % % % % % % %

</TABLE>

DURING THE PERIODS SHOWN IN THE CHART FOR SPARTAN MASSACHUSETTS
MUNICIPAL INCOME, THE HIGHEST RETURN FOR A QUARTER WAS __% (QUARTER
ENDED _______) AND THE LOWEST RETURN FOR A QUARTER WAS __%
(QUARTER ENDED _______).

AVERAGE ANNUAL RETURNS

[The returns in the following table do not include the effect of the
$5 account closeout fee for Spartan Massachusetts Municipal Money
Market. [ The returns in the following table include the effect of
the $5 account closeout fee based on an average account size for
Spartan Massachusetts Municipal Money Market. ]

For the periods ended Past 1 year Past 5 years Past 10 years/Life of fund
December 31, 1999

Spartan Massachusetts % % %A
Municipal Money Market

Fidelity Massachusetts % % %
Municipal Money Market

Spartan Massachusetts % % %
Municipal Income

Lehman Bros. Muni Bond Index % % %

Lehman Bros. MA Enh. Muni % % %
Bond Index

Lipper MA Muni Debt Funds % % %
Average

</TABLE>

A FROM MARCH 4, 1991.

[If FMR had not reimbursed certain fund expenses during these periods,
Spartan Massachusetts Municipal Money Market, Fidelity
Massachusetts Municipal Money Market, and Spartan Massachusetts
Municipal Income's returns would have been lower.]

The Lehman Brothers Municipal Bond Index is a market value-weighted
index of investment-grade municipal bonds with maturities of one year
or more.

The Lehman Brothers Massachusetts Enhanced Municipal Bond Index is a
market value-weighted index of Massachusetts investment-grade
municipal bonds with maturities of one year or more.

The Lipper Funds Average reflects the performance (excluding sales
charges) of mutual funds with similar objectives.

FEE TABLE

The following table describes the fees and expenses that are incurred
when you buy, hold, or sell shares of a fund. [The annual fund
operating expenses provided below for Spartan Massachusetts Municipal
Money Market, Massachusetts Municipal Money Market, and Spartan
Massachusetts Municipal Income are based on historical expenses,
adjusted to reflect current fees.] [ The annual fund operating
expenses provided below for Spartan Massachusetts Municipal Money
Market, Massachusetts Municipal Money Market, and Spartan
Massachusetts Municipal Income do not reflect the effect of any
expense reimbursements or reduction of certain expenses during the
period .] [The annual fund operating expenses provided below for
Spartan Massachusetts Municipal Money Market, Massachusetts
Municipal Money Market, and Spartan Massachusetts Municipal Incom e
are based on historical expenses.]

SHAREHOLDER FEES (PAID BY THE INVESTOR DIRECTLY)

Sales charge (load) on None
purchases and reinvested
distributions

Deferred sales charge (load) None
on redemptions

Exchange fee

for Spartan Massachusetts $5.00
Muni Money MarketA,B

Wire transaction fee

for Spartan Massachusetts $5.00
Muni Money Market onlyA

Checkwriting fee, per check
written

for Spartan Massachusetts $2.00
Muni Money Market onlyA

Account closeout fee

for Spartan Massachusetts $5.00
Muni Money Market onlyA

Annual account maintenance $12.00
fee (for accounts under
$2,500)

A THE FEES FOR INDIVIDUAL TRANSACTIONS ARE WAIVED IF YOUR ACCOUNT
BALANCE AT THE TIME OF THE TRANSACTION IS $50,000 OR MORE.

B YOU WILL NOT PAY AN EXCHANGE FEE IF YOU EXCHANGE THROUGH ANY OF
FIDELITY'S AUTOMATED EXCHANGE SERVICES.

ANNUAL FUND OPERATING EXPENSES (PAID FROM FUND ASSETS)

SPARTAN MA MUNICIPAL MONEY Management fee 0.50%
MARKET

Distribution and Service None
(12b-1) fee

Other expenses __%

Total annual fund operating __%
expenses

MA MUNICIPAL MONEY MARKET Management fee ___%

Distribution and Service None
(12b-1) fee

Other expenses %

Total annual fund operating ___%
expenses

SPARTAN MA MUNICIPAL MONEY Management fee ___%
MARKET

Distribution and Service ___%
(12b-1) fee

Other expenses %

Total annual fund operating ___%
expenses

A EFFECTIVE APRIL 1, 1997, FMR HAS VOLUNTARILY AGREED TO REIMBURSE
SPARTAN MASSACHUSETTS MUNICIPAL INCOME TO THE EXTENT THAT TOTAL
OPERATING EXPENSES (EXCLUDING INTEREST, TAXES, BROKERAGE COMMISSIONS,
AND EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF ITS AVERAGE NET
ASSETS, EXCEED 0.55%. THIS ARRANGEMENT CAN BE DISCONTINUED BY
FMR AT ANY TIME.

[ A portion of the brokerage commissions that certain funds pay is
used to reduce each of those fund's expenses. In addition, through
arrangements with Spartan Massachusetts Municipal Money
Market's custodian and transfer agent, credits realized as a
result of uninvested cash balances are used to reduce fund expenses.
In addition, through arrangements with Massachusetts Municipal Money
Market and Spartan Massachusetts Municipal Income's custodian and
transfer agent, credits realized as a result of uninvested cash
balances are used to reduce custodian and transfer agent expenses.
Including these reductions, the total fund operating expenses, after
reimbursement for Spartan Massachusetts Municipal Income, would have
been __% for Massachusetts Municipal Money Market, __% for Spartan
Massachusetts Municipal Money Market, and __% for Spartan
Massachusetts Municipal Income.]

This EXAMPLE helps you compare the cost of investing in the funds with
the cost of investing in other mutual funds.

Let's say, hypothetically, that each fund's annual return is 5% and
that your shareholder fees and each fund's annual operating expenses
are exactly as described in the fee table. This example illustrates
the effect of fees and expenses, but is not meant to suggest actual or
expected fees and expenses or returns, all of which may vary. For
every $10,000 you invested, here's how much you would pay in total
expenses if you close your account at the end of each time
period indicated and if you leave your account open:

Account open Account closed

SPARTAN MA MUNICIPAL MONEY 1 year $ $
MARKET

3 years $ $

5 years $ $

10 years $ $

MA MUNICIPAL MONEY MARKET 1 year $ $

3 years $ $

5 years $ $

10 years $ $

SPARTAN MA MUNICIPAL INCOME 1 year $ $

3 years $ $

5 years $ $

10 years $ $

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE

MASSACHUSETTS MUNICIPAL MONEY MARKET FUND seeks as high a level of
current income, exempt from federal income tax and Massachusetts
personal income tax, as is consistent with preservation of capital.

PRINCIPAL INVESTMENT STRATEGIES

FMR normally invests the fund's assets in municipal money market
securities, including shares of a municipal money market fund managed
by an affiliate of FMR.

FMR normally invests at least 65% of the fund's total assets in
municipal securities whose interest is exempt from Massachusetts
personal income tax and at least 80% of the fund's assets
in municipal securities whose interest is exempt from federal
income tax. Municipal securities whose interest is exempt from federal
and Massachusetts income taxes include securities issued by U.S.
territories and possessions, such as Guam, the Virgin Islands, and
Puerto Rico, and their political subdivisions and public corporations.

FMR may invest the fund's assets in municipal securities whose
interest is subject to Massachusetts personal income tax. Although FMR
does not currently intend to invest the fund's assets in municipal
securities whose interest is subject to federal income tax, FMR may
invest all of the fund's assets in municipal securities whose interest
is subject to the federal alternative minimum tax.

FMR may invest more than 25% of the fund's total assets in municipal
securities that finance similar projects, such as those relating to
education, health care, transportation, and utilities.

In buying and selling securities for the fund, FMR complies with
industry-standard requirements for money market funds regarding the
quality, maturity, and diversification of the fund's investments. FMR
stresses maintaining a stable $1.00 share price, liquidity, and
income.

INVESTMENT OBJECTIVE

SPARTAN MASSACHUSETTS MUNICIPAL MONEY MARKET FUND seeks as high a
level of current income, exempt from federal and Massachusetts
personal income tax, as is consistent with the preservation of capital
and liquidity.

PRINCIPAL INVESTMENT STRATEGIES

FMR normally invests the fund's assets in municipal money market
securities, including shares of a municipal money market fund managed
by an affiliate of FMR.

FMR may invest more than 25% of the fund's total assets in municipal
securities that finance similar projects, such as those relating to
education, health care, transportation, and utilities.

INVESTMENT OBJECTIVE

SPARTAN MASSACHUSETTS MUNICIPAL INCOME FUND seeks a high level of
current income, exempt from federal income tax and Massachusetts
personal income tax.

PRINCIPAL INVESTMENT STRATEGIES

FMR normally invests the fund's assets in investment-grade municipal
debt securities (those of medium and high quality) .

FMR normally invests at least 80% of the fund's assets in
municipal securities whose interest is exempt from federal and
Massachusetts personal income taxes. Municipal securities whose
interest is exempt from federal and Massachusetts income taxes include
securities issued by U.S. territories and possessions, such as Guam,
the Virgin Islands, and Puerto Rico, and their political subdivisions
and public corporations.

FMR may invest more than 25% of the fund's total assets in municipal
securities that finance similar projects, such as those relating to
education, health care, transportation, and utilities.

FMR uses the Lehman Brothers Massachusetts Enhanced Municipal Bond
Index as a guide in structuring the fund and selecting its
investments. FMR manages the fund to have similar overall interest
rate risk to the index. As of January 31, 2000 , the
dollar-weighted average maturity of the fund and the index was
approximately __ and __ years, respectively.

FMR allocates the fund's assets among different market sectors (for
example, general obligation bonds of a state or bonds financing a
specific project) and different maturities based on its view of the
relative value of each sector and maturity.

Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.

In buying and selling securities for the fund, FMR analyzes a
security's structural features and current price compared to its
estimated long-term value, any short-term trading opportunities
resulting from market inefficiencies, and the credit quality of its
issuer.

FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates, or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.

DESCRIPTION OF PRINCIPAL SECURITY TYPES

DEBT SECURITIES are used by issuers to borrow money. The issuer
usually pays a fixed, variable, or floating rate of interest, and must
repay the amount borrowed at the maturity of the security. Some debt
securities, such as zero coupon bonds, do not pay current interest but
are sold at a discount from their face values. Municipal debt
securities include general obligation bonds of municipalities, local
or state governments, project or revenue-specific bonds, or
pre-refunded or escrowed bonds.

MONEY MARKET SECURITIES are high-quality, short-term securities that
pay a fixed, variable , or floating interest rate. Securities
are often specifically structured so that they are eligible
investments for a money market fund. For example, in order to satisfy
the maturity restrictions for a money market fund, some money market
securities have demand or put features , which have the effect
of shortening the security's maturity. Municipal money market
securities include variable rate demand notes, commercial paper,
municipal notes , and shares of municipal money market funds.

MUNICIPAL SECURITIES are issued to raise money for a variety of public
and private purposes, including general financing for state and local
governments, or financing for a specific project or public facility.
Municipal securities may be fully or partially backed by the local
government, by the credit of a private issuer, by the current or
anticipated revenues from a specific project or specific assets, or by
domestic or foreign entities providing credit support such as letters
of credit, guarantees , or insurance.

PRINCIPAL INVESTMENT RISKS

Many factors affect each fund's performance. Because FMR concentrates
each fund's investments in Massachusetts, the fund's performance is
expected to be closely tied to economic and political conditions
within that state and to be more volatile than the performance of a
more geographically diversified fund.

The money market funds' yields will change daily based on changes in
interest rates and other market conditions. Although each fund
is managed to maintain a stable $1.00 share price, there is no
guarantee that the fund will be able to do so. For example, a major
increase in interest rates or a decrease in the credit quality of the
issuer of one of a fund's investments could cause the fund's share
price to decrease. While the funds will be charged premiums by a
mutual insurance company for coverage of specified types of losses
related to default or bankruptcy on certain securities, a fund may
incur losses regardless of the insurance.

The bond fund's yield and share price change daily based on changes in
interest rates and market conditions and in response to other
economic, political , or financial developments. The fund's
reaction to these developments will be affected by the types and
maturities of securities in which the fund invests, the financial
condition, industry and economic sector, and geographic location of an
issuer, and the fund's level of investment in the securities of that
issuer. Because FMR may invest a significant percentage of Spartan
Massachusetts Municipal Income's assets in a single issuer, the fund's
performance could be closely tied to the market value of that one
issuer and could be more volatile than the performance of more
diversified funds. When you sell your shares of the fund, they
could be worth more or less than what you paid for them.

The following factors can significantly affect the
fund's performance:

MUNICIPAL MARKET VOLATILITY. Municipal securities can be significantly
affected by political changes as well as uncertainties in the
municipal market related to taxation, legislative changes, or the
rights of municipal security holders. Because many municipal
securities are issued to finance similar projects, especially those
relating to education, health care, transportation , and
utilities, conditions in those sectors can affect the overall
municipal market. In addition, changes in the financial condition of
an individual municipal insurer can affect the overall municipal
market.

INTEREST RATE CHANGES. Debt and money market securities have varying
levels of sensitivity to changes in interest rates. In general, the
price of a debt or money market security can fall when interest rates
rise and can rise when interest rates fall. Securities with longer
maturities can be more sensitive to interest rate changes. In other
words, the longer the maturity of a security, the greater the impact a
change in interest rates could have on the security's price. In
addition, short-term and long-term interest rates do not necessarily
move in the same amount or the same direction. Short-term securities
tend to react to changes in short-term interest rates, and long-term
securities tend to react to changes in long-term interest rates.

FOREIGN EXPOSURE. Entities located in foreign countries that provide
credit support or a maturity-shortening structure can involve
increased risks. Extensive public information about the provider may
not be available and unfavorable political, economic , or
governmental developments could affect the value of the security.

GEOGRAPHIC CONCENTRATION. The Commonwealth of Massachusetts has
experienced significant financial difficulty, although the past four
years ended with operating surpluses.

ISSUER-SPECIFIC CHANGES. Changes in the financial condition of an
issuer, changes in specific economic or political conditions that
affect a particular type of security or issuer, and changes in general
economic or political conditions can affect the credit quality or
value of an issuer's securities. Lower-quality debt securities (those
of less than investment-grade quality) tend to be more sensitive to
these changes than higher-quality debt securities. Entities providing
credit support or a maturity-shortening structure also can be affected
by these types of changes. Municipal securities backed by current or
anticipated revenues from a specific project or specific assets can be
negatively affected by the discontinuance of the taxation supporting
the project or assets or the inability to collect revenues for the
project or from the assets. If the Internal Revenue Service determines
an issuer of a municipal security has not complied with applicable tax
requirements, interest from the security could become taxable and the
security could decline significantly in value. In addition, if the
structure of a security fails to function as intended, interest from
the security could become taxable or the security could decline in
value.

In response to market, economic, political , or other
conditions, FMR may temporarily use a different investment strategy
for defensive purposes. If FMR does so, different factors could affect
a fund's performance, and a fund could distribute income
subject to federal or Massachusetts personal income tax.

FUNDAMENTAL INVESTMENT POLICIES

The policies discussed below are fundamental, that is, subject to
change only by shareholder approval.

MASSACHUSETTS MUNICIPAL MONEY MARKET FUND seeks as high a level of
current income, exempt from federal income tax and Massachusetts
personal income tax, as is consistent with preservation of capital.

SPARTAN MASSACHUSETTS MUNICIPAL MONEY MARKET FUND seeks as high a
level of income, exempt from federal and Massachusetts personal income
tax, as is consistent with the preservation of capital and
liquidity.

SPARTAN MASSACHUSETTS MUNICIPAL INCOME FUND seeks a high level of
current income, exempt from federal income tax and Massachusetts
personal income tax.

VALUING SHARES

Each fund is open for business each day the New York Stock Exchange
(NYSE) is open.

Each fund's net asset value per share (NAV) is the value of a single
share. Fidelity normally calculates each fund's NAV as of the close of
business of the NYSE, normally 4:00 p.m. Eastern time. However, NAV
may be calculated earlier if trading on the NYSE is restricted or as
permitted by the Securities and Exchange Commission (SEC). Each fund's
assets are valued as of this time for the purpose of computing the
fund's NAV.

To the extent that each fund's assets are traded in other markets on
days when the NYSE is closed, the value of the fund's assets may be
affected on days when the fund is not open for business. In addition,
trading in some of a fund's assets may not occur on days when the fund
is open for business.

Each money market fund's assets are valued on the basis of amortized
cost.

The bond fund's assets are valued primarily on the basis of
information furnished by a pricing service or market quotations. If
market quotations or information furnished by a pricing service is not
readily available for a security or if a security's value has been
materially affected by events occurring after the close of the
exchange or market on which the security is principally traded, that
security may be valued by another method that the Board of Trustees
believes accurately reflects fair value. A security's valuation may
differ depending on the method used for determining value.

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

GENERAL INFORMATION

Fidelity Investments(registered trademark) was established in 1946 to
manage one of America's first mutual funds. Today, Fidelity is the
largest mutual fund company in the country, and is known as an
innovative provider of high-quality financial services to individuals
and institutions.

In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage
Services, Inc. (FBSI). Fidelity is also a leader in providing
tax-advantaged retirement plans for individuals investing on their own
or through their employer.

For account, product and service information, please use the following
Web site and phone numbers:

(small solid bullet) For information over the Internet, visit
Fidelity's Web site at www.fidelity.com.

(small solid bullet) For accessing account information automatically
by phone, use Fidelity Automated Service Telephone (FASTSM),
1-800-544-5555.

(small solid bullet) For exchanges, redemptions, and account
assistance , 1-800-544-6666.

(small solid bullet) For mutual fund and brokerage information ,
1-800-544-6666.

(small solid bullet) For retirement information,
1-800-544-4774.

(small solid bullet) TDD - Service for the Deaf and Hearing-Impaired,
1-800-544-0118 (9:00 a.m. - 9:00 p.m. Eastern time).

Please use the following addresses:

BUYING SHARES

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002

OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048

SELLING SHARES

Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602

OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75039-5587

You may buy or sell shares of the funds through an investment
professional. If you invest through an investment professional, the
procedures for buying, selling, and exchanging shares of a fund and
the account features and policies may differ. Additional fees may also
apply to your investment in a fund, including a transaction fee if you
buy or sell shares of the fund through a broker or other investment
professional.

Certain methods of contacting Fidelity, such as by telephone or
electronically, may be unavailable or delayed (for example, during
periods of unusual market activity). In addition, the level and type
of service available may be restricted based on criteria established
by Fidelity.

The different ways to set up (register) your account with Fidelity are
listed in the following table.

WAYS TO SET UP YOUR ACCOUNT

INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS

GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS

TRUST
FOR MONEY BEING INVESTED BY A TRUST

BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS OR
OTHER GROUPS

BUYING SHARES

The price to buy one share of each fund is the fund's NAV. Each fund's
shares are sold without a sales charge.

Your shares will be bought at the next NAV calculated after your
investment is received in proper form.

Short-term or excessive trading into and out of a fund may harm
performance by disrupting portfolio management strategies and by
increasing expenses. Accordingly, a fund may reject any purchase
orders, including exchanges, particularly from market timers or
investors who, in FMR's opinion, have a pattern of short-term or
excessive trading or whose trading has been or may be disruptive to
that fund. For these purposes, FMR may consider an investor's trading
history in that fund or other Fidelity funds, and accounts under
common ownership or control.

Each fund may stop offering shares completely or may offer shares only
on a limited basis, for a period of time or permanently.

When you place an order to buy shares, note the following:

(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.

(small solid bullet) Fidelity does not accept cash.

(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.

(small solid bullet) Fidelity reserves the right to limit the number
of checks processed at one time.

(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees a fund or
Fidelity has incurred.

Certain financial institutions that have entered into sales agreements
with Fidelity Distributors Corporation (FDC) may enter confirmed
purchase orders on behalf of customers by phone, with payment to
follow no later than the time when a fund is priced on the following
business day. If payment is not received by that time, the order will
be canceled and the financial institution could be held liable for
resulting fees or losses.

MINIMUMS

TO OPEN AN ACCOUNT

For Spartan MA Muni Money Market $25,000
For MA Muni Money Market $5,000
For Spartan MA Muni Income $10,000

TO ADD TO AN ACCOUNT

For Spartan MA Muni Money Market $1,000
Through regular investment plans $500
For MA Muni Money Market $250
Through regular investment plans $100
For Spartan MA Muni Income $1,000
Through regular investment plans $500

MINIMUM BALANCE

For Spartan MA Muni Money Market $10,000 For MA Muni Money Market
$2,000 For Spartan MA Muni Income $5,000

There is no minimum account balance or initial or subsequent purchase
minimum for investments through Fidelity Portfolio Advisory ServicesSM
or a qualified state tuition program. In addition, each fund may waive
or lower purchase minimums in other circumstances.

KEY INFORMATION

PHONE 1-800-544-6666 TO OPEN AN ACCOUNT
(small solid bullet) Exchange
from another Fidelity fund.
Call the phone number at left.

TO ADD TO AN ACCOUNT
(small solid bullet) Exchange
from another Fidelity fund.
Call the phone number at left.
(small solid bullet) Use
Fidelity Money
Line(registered trademark)
to transfer from your bank
account.

INTERNET WWW.FIDELITY.COM TO OPEN AN ACCOUNT
(small solid bullet) Complete
and sign the application.
Make your check payable to
the complete name of the
fund. Mail to the address
under "Mail" below.

TO ADD TO AN ACCOUNT
(small solid bullet) Exchange
from another Fidelity fund.
(small solid bullet) Use
Fidelity Money Line to
transfer from your bank
account.

MAIL FIDELITY INVESTMENTS TO OPEN AN ACCOUNT
P.O. BOX 770001 CINCINNATI, (small solid bullet) Complete
OH 45277-0002 and sign the application.
Make your check payable to
the complete name of the
fund. Mail to the address at
left.

TO ADD TO AN ACCOUNT
(small solid bullet) Make
your check payable to the
complete name of the fund.
Indicate your fund account
number on your check and
mail to the address at left.
(small solid bullet) Exchange
from another Fidelity fund.
Send a letter of instruction
to the address at left,
including your name, the
funds' names, the fund
account numbers, and the
dollar amount or number of
shares to be exchanged.

IN PERSON TO OPEN AN ACCOUNT
(small solid bullet) Bring
your application and check
to a Fidelity Investor
Center. Call 1-800-544-9797
for the center nearest you.

TO ADD TO AN ACCOUNT
(small solid bullet) Bring
your check to a Fidelity
Investor Center. Call
1-800-544-9797 for the
center nearest you.

WIRE TO OPEN AN ACCOUNT
(small solid bullet) Call
1-800-544-6666 to set up
your account and to arrange
a wire transaction.
(small solid bullet) Wire
within 24 hours to: For
Spartan Massachusetts
Municipal Money Market and
Spartan Massachusetts
Municipal Income: Bankers
Trust Company, Bank Routing
# 021001033, Account #
00163053. For Massachusetts
Municipal Money Market: The
Bank of New York, Bank
Routing # 021000018, Account
# 8900118245.
(small solid bullet) Specify
the complete name of the
fund and include your new
fund account number and your
name.

TO ADD TO AN ACCOUNT
(small solid bullet) Call
1-800-544-6666 to arrange a
wire transaction for
Massachusetts Municipal
Money Market.
(small solid bullet) Wire to:
For Spartan Massachusetts
Municipal Money Market and
Spartan Massachusetts
Municipal Income: Bankers
Trust Company, Bank Routing
# 021001033, Account #
00163053. For Massachusetts
Municipal Money Market: The
Bank of New York, Bank
Routing # 021000018, Account
# 8900118245.
(small solid bullet) Specify
the complete name of the
fund and include your fund
account number and your name.

AUTOMATICALLY TO OPEN AN ACCOUNT
(small solid bullet) Not
available.

TO ADD TO AN ACCOUNT
(small solid bullet) Use
Fidelity Automatic Account
Builder(registered
trademark) or Direct Deposit.
(small solid bullet) Use
Fidelity Automatic Exchange
Service to exchange from a
Fidelity money market fund.

SELLING SHARES

The price to sell one share of each fund is the fund's NAV.

Your shares will be sold at the next NAV calculated after your order
is received in proper form.

Certain requests must include a signature guarantee. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:

(small solid bullet) You wish to sell more than $100,000 worth of
shares;

(small solid bullet) Your account registration has changed within the
last 15 or 30 days, depending on your account;

(small solid bullet) The check is being mailed to a different address
than the one on your account (record address);

(small solid bullet) The check is being made payable to someone other
than the account owner; or

(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.

You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if
authorized under state law), securities exchange or association,
clearing agency, or savings association. A notary public cannot
provide a signature guarantee.

When you place an order to sell shares, note the following:

(small solid bullet) If you are selling some but not all of your
Spartan Massachusetts Municipal Money Market shares, leave at least
$10,000 worth of shares in the account to keep it open, except
accounts not subject to account minimums.

(small solid bullet) If you are selling some but not all of your
Massachusetts Municipal Money Market shares, leave at least $2,000
worth of shares in the account to keep it open, except accounts not
subject to account minimums.

(small solid bullet) If you are selling some but not all of your
Spartan Massachusetts Municipal Income shares, leave at least $5,000
worth of shares in the account to keep it open, except accounts not
subject to account minimums.

(small solid bullet) Normally, Fidelity will process redemptions by
the next business day, but Fidelity may take up to seven days to
process redemptions if making immediate payment would adversely affect
a fund.

(small solid bullet) Redemption proceeds (other than exchanges) may be
delayed until money from prior purchases sufficient to cover your
redemption has been received and collected. This can take up to seven
business days after a purchase.

(small solid bullet) Redemption proceeds may be paid in securities or
other property rather than in cash if FMR determines it
is in the best interests of a fund.

(small solid bullet) If you sell shares by writing a check and
the amount of the check is greater than the value of your account,
your check will be returned to you and you may be subject to
additional charges.

(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.

(small solid bullet) Unless otherwise instructed, Fidelity will send a
check to the record address.

KEY INFORMATION

PHONE 1-800-544-6666 (small solid bullet) Call the
phone number at left to
initiate a wire transaction
or to request a check for
your redemption.

(small solid bullet) Use
Fidelity Money Line to
transfer to your bank account.

(small solid bullet) Exchange
to another Fidelity fund.
Call the phone number at left.

INTERNET WWW.FIDELITY.COM (small solid bullet) Exchange
to another Fidelity fund.

(small solid bullet) Use
Fidelity Money Line to
transfer to your bank account.

MAIL FIDELITY INVESTMENTS INDIVIDUAL, JOINT TENANT,
P.O. BOX 660602 DALLAS, TX SOLE PROPRIETORSHIP, UGMA,
75266-0602 UTMA
(small solid bullet) Send a
letter of instruction to the
address at left, including
your name, the fund's name,
your fund account number,
and the dollar amount or
number of shares to be sold.
The letter of instruction
must be signed by all
persons required to sign for
transactions, exactly as
their names appear on the
account.

TRUST
(small solid bullet) Send a
letter of instruction to the
address at left, including
the trust's name, the fund's
name, the trust's fund
account number, and the
dollar amount or number of
shares to be sold. The
trustee must sign the letter
of instruction indicating
capacity as trustee. If the
trustee's name is not in the
account registration,
provide a copy of the trust
document certified within
the last 60 days.

BUSINESS OR ORGANIZATION
(small solid bullet) Send a
letter of instruction to the
address at left, including
the firm's name, the fund's
name, the firm's fund
account number, and the
dollar amount or number of
shares to be sold. At least
one person authorized by
corporate resolution to act
on the account must sign the
letter of instruction.

(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.

EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Call
1-800-544-6666 for
instructions.

IN PERSON INDIVIDUAL, JOINT TENANT,
SOLE PROPRIETORSHIP, UGMA,
UTMA
(small solid bullet) Bring a
letter of instruction to a
Fidelity Investor Center.
Call 1-800-544-9797 for the
center nearest you. The
letter of instruction must
be signed by all persons
required to sign for
transactions, exactly as
their names appear on the
account.

TRUST
(small solid bullet) Bring a
letter of instruction to a
Fidelity Investor Center.
Call 1-800-544-9797 for the
center nearest you. The
trustee must sign the letter
of instruction indicating
capacity as trustee. If the
trustee's name is not in the
account registration,
provide a copy of the trust
document certified within
the last 60 days.

BUSINESS OR ORGANIZATION
(small solid bullet) Bring a
letter of instruction to a
Fidelity Investor Center.
Call 1-800-544-9797 for the
center nearest you. At least
one person authorized by
corporate resolution to act
on the account must sign the
letter of instruction.

(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.

EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Visit a
Fidelity Investor Center for
instructions. Call
1-800-544-9797 for the
center nearest you.

AUTOMATICALLY (small solid bullet) Use
Fidelity Automatic Exchange
Service to exchange from
Massachusetts Municipal
Money Market to another
Fidelity fund.

(small solid bullet) Use
Personal Withdrawal Service
to set up periodic
redemptions from your bond
fund account.

CHECK (small solid bullet) Write a
check to sell shares from
your account.

EXCHANGING SHARES

An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.

As a shareholder, you have the privilege of exchanging shares of a
fund for shares of other Fidelity funds.

However, you should note the following policies and restrictions
governing exchanges:

(small solid bullet) The fund you are exchanging into must be
available for sale in your state.

(small solid bullet) You may exchange only between accounts that are
registered in the same name, address, and taxpayer identification
number.

(small solid bullet) Before exchanging into a fund, read its
prospectus.

(small solid bullet) You may pay a $5.00 fee for each exchange out of
Spartan Massachusetts Municipal Money Market, unless you place your
transaction through Fidelity's automated exchange services.

(small solid bullet) Exchanges may have tax consequences for you.

(small solid bullet) Currently, there is no limit on the number of
exchanges out of Massachusetts Municipal Money Market.

(small solid bullet) Spartan Massachusetts Municipal Money Market
and Spartan Massachusetts Municipal Income may temporarily or
permanently terminate the exchange privilege of any investor who makes
more than four exchanges out of the fund per calendar year.
Accounts under common ownership or control will be counted together
for purposes of the four exchange limit.

(small solid bullet) Each fund may refuse exchange purchases by any
person or group if, in FMR's judgment, the fund would be unable to
invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.

The funds may terminate or modify the exchange privileges in the
future.

Other funds may have different exchange restrictions, and may
impose trading fees of up to 3.00% of the amount exchanged. Check each
fund's prospectus for details.

ACCOUNT FEATURES AND POLICIES

FEATURES

The following features are available to buy and sell shares of the
funds.

AUTOMATIC INVESTMENT AND WITHDRAWAL PROGRAMS. Fidelity offers
convenient services that let you automatically transfer money into
your account, between accounts, or out of your account. While
automatic investment programs do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses,
and other long-term financial goals. Automatic withdrawal or exchange
programs can be a convenient way to provide a consistent income flow
or to move money between your investments.

FIDELITY AUTOMATIC ACCOUNT
BUILDER(registered
trademark) TO MOVE MONEY
FROM YOUR BANK ACCOUNT TO A
FIDELITY FUND.

MINIMUM FREQUENCY PROCEDURES

MA Muni Money Market: $100 Monthly or quarterly (small solid bullet) To set
Spartan MA Muni Money up for a new account,
Market, and Spartan MA Muni complete the appropriate
Income: $500 section on the fund
application.

(small solid bullet) To set
up for existing accounts,
call 1-800-544-6666 or visit
Fidelity's Web site for an
application.

(small solid bullet) To make
changes, call 1-800-544-6666
at least three business days
prior to your next scheduled
investment date.

DIRECT DEPOSIT TO SEND ALL OR
A PORTION OF YOUR PAYCHECK
OR GOVERNMENT CHECK TO A
FIDELITY FUND.A

MINIMUM FREQUENCY PROCEDURES

MA Muni Money Market: $100 Every pay period (small solid bullet) To set
Spartan MA Muni Money Market up for a new account, check
and Spartan MA Muni Income: the appropriate box on the
$500 fund application.

(small solid bullet) To set
up for an existing account,
call 1-800-544-6666 or visit
Fidelity's Web site for an
authorization form.

(small solid bullet) To make
changes you will need a new
authorization form. Call
1-800-544-6666 or visit
Fidelity's Web site to
obtain one.

A BECAUSE BOND FUND SHARE
PRICES FLUCTUATE, THAT FUND
MAY NOT BE AN APPROPRIATE
CHOICE FOR DIRECT DEPOSIT OF
YOUR ENTIRE CHECK.

FIDELITY AUTOMATIC EXCHANGE
SERVICE TO MOVE MONEY FROM A
FIDELITY MONEY MARKET FUND
TO ANOTHER FIDELITY FUND.

MINIMUM FREQUENCY PROCEDURES

MA Muni Money Market: $100 Monthly, bimonthly, (small solid bullet) To set
Spartan MA Muni Money Market quarterly, or annually up, call 1-800-544-6666
and Spartan MA Muni Income: after both accounts are
$500 opened.

(small solid bullet) To make
changes, call 1-800-544-6666
at least three business days
prior to your next scheduled
exchange date.

</TABLE>

PERSONAL WITHDRAWAL SERVICE
TO SET UP PERIODIC
REDEMPTIONS FROM YOUR BOND
ACCOUNT TO YOU OR TO YOUR
BANK ACCOUNT.

FREQUENCY PROCEDURES

Monthly (small solid bullet) To set
up, call 1-800-544-6666.

(small solid bullet) To make
changes, call Fidelity at
1-800-544-6666 at least
three business days prior to
your next scheduled
withdrawal date.

OTHER FEATURES. The following other features are also available to buy
and sell shares of the funds.

WIRE
TO PURCHASE AND SELL SHARES VIA THE FEDERAL RESERVE WIRE SYSTEM.

(small solid bullet) You must sign up for the Wire feature before
using it. Complete the appropriate section on the application when
opening your account, or call 1-800-544- 6666 to add the feature
after your account is opened. Call 1-800-544- 6666 before your
first use to verify that this feature is set up on your account.

(small solid bullet) To sell shares by wire, you must designate the
U.S. commercial bank account(s) into which you wish the redemption
proceeds deposited.

(small solid bullet) There may be a $5.00 fee for each wire purchase
for Spartan Massachusetts Municipal Money Market.

(small solid bullet) There may be a $5.00 fee for each wire redemption
for Spartan Massachusetts Municipal Money Market.

FIDELITY MONEY LINE
TO TRANSFER MONEY BETWEEN YOUR BANK ACCOUNT AND YOUR FUND ACCOUNT.

(small solid bullet) You must sign up for the Money Line feature
before using it. Complete the appropriate section on the application
and then call 1-800-544-6666 or visit Fidelity's Web site before your
first use to verify that this feature is set up on your account.

(small solid bullet) Most transfers are complete within three business
days of your call.

(small solid bullet) Minimum purchase: Massachusetts Municipal
Money Market: $100
Spartan Massachusetts Municipal Money Market and Spartan Massachusetts
Municipal Income: $500

(small solid bullet) Maximum purchase: $100,000

FIDELITY ON-LINE XPRESS+(registered trademark)
TO MANAGE YOUR INVESTMENTS THROUGH YOUR PC.

CALL 1-800-544- 0240 OR VISIT FIDELITY'S WEB SITE FOR MORE
INFORMATION.

(small solid bullet) For account balances and holdings;

(small solid bullet) To review recent account history;

(small solid bullet) For mutual fund and brokerage trading; and

(small solid bullet) For access to research and analysis tools.

FIDELITY ONLINE TRADING
TO ACCESS AND MANAGE YOUR ACCOUNT OVER THE INTERNET AT FIDELITY'S WEB
SITE.

(small solid bullet) For account balances and holdings;

(small solid bullet) To review recent account history;

(small solid bullet) To obtain quotes;

(small solid bullet) For mutual fund and brokerage trading; and

(small solid bullet) To access third-party research on companies,
stocks, mutual funds and the market.

FAST
TO ACCESS AND MANAGE YOUR ACCOUNT AUTOMATICALLY BY PHONE USING
TOUCH TONE OR SPEECH RECOGNITION.

CALL 1-800-544-5555.

(small solid bullet) For account balances and holdings;

(small solid bullet) For mutual fund and brokerage trading;

(small solid bullet) To obtain quotes;

(small solid bullet) To review orders and mutual fund activity; and

(small solid bullet) To change your personal identification number
(PIN).

CHECKWRITING
TO REDEEM SHARES FROM YOUR ACCOUNT.

(small solid bullet) To set up, complete the appropriate section on
the application.

(small solid bullet) All account owners must sign a signature card to
receive a checkbook.

(small solid bullet) You may write an unlimited number of checks.

(small solid bullet) Minimum check amount: $500 for MA Muni Money
Market and $1,000 for Spartan MA Muni Money Market and Spartan MA Muni
Income.

(small solid bullet) Do not try to close out your account by check.

(small solid bullet) To obtain more checks, call Fidelity at
1-800-544-6666.

POLICIES

The following policies apply to you as a shareholder.

STATEMENTS AND REPORTS that Fidelity sends to you include the
following:

(small solid bullet) Confirmation statements (after transactions
affecting your account balance except reinvestment of distributions in
the fund or another fund and certain transactions through automatic
investment or withdrawal programs).

(small solid bullet) Monthly or quarterly account statements
(detailing account balances and all transactions completed during the
prior month or quarter).

(small solid bullet) Financial reports (every six months).

To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more
than one account in a fund. Call Fidelity at 1-800-544-8544 if you
need additional copies of financial reports or prospectuses.

Electronic copies of most financial reports and prospectuses are
available at Fidelity's Web site. To participate in Fidelity's
electronic delivery program, call Fidelity or visit Fidelity's Web
site for more information.

You may initiate many TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to sell and
exchange by telephone, call Fidelity for instructions.

When you sign your ACCOUNT APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct
and that you are not subject to 31% backup withholding for failing to
report income to the IRS. If you violate IRS regulations, the IRS can
require a fund to withhold 31% of your taxable distributions and
redemptions.

Fidelity may deduct an ANNUAL MAINTENANCE FEE of $12.00 from accounts
with a value of less than $2,500, subject to an annual maximum charge
of $24.00 per shareholder. It is expected that accounts will be valued
on the second Friday in November of each year. Accounts opened after
September 30 will not be subject to the fee for that year. The fee,
which is payable to Fidelity, is designed to offset in part the
relatively higher costs of servicing smaller accounts. This fee will
not be deducted from Fidelity brokerage accounts, retirement accounts
(except non-prototype retirement accounts), accounts using regular
investment plans, or if total assets with Fidelity exceed $30,000.
Eligibility for the $30,000 waiver is determined by aggregating
accounts with Fidelity maintained by Fidelity Service Company, Inc. or
FBSI which are registered under the same social security number or
which list the same social security number for the custodian of a
Uniform Gifts/Transfers to Minors Act account.

If your ACCOUNT BALANCE falls below $2,000 for Massachusetts Municipal
Money Market, $10,000 for Spartan Massachusetts Municipal Money Market
or $5,000 for Spartan Massachusetts Municipal Income (except
accounts not subject to account minimums), you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity may close your account and send the proceeds to you.
Your shares will be sold at the NAV on the day your account is closed
and, for Spartan Massachusetts Municipal Money Market, the $5.00
account closeout fee will be charged.

The FEES FOR INDIVIDUAL TRANSACTIONS are waived if your account
balance at the time of the transaction is $50,000 or more. Otherwise,
you should note the following:

(small solid bullet) The $2.00 checkwriting fee will be deducted from
your account.

(small solid bullet) The $5.00 exchange fee will be deducted from the
amount of your exchange.

(small solid bullet) The $5.00 wire transaction fee will be deducted
from the amount of your wire.

(small solid bullet) The $5.00 account closeout fee does not apply to
exchanges or wires.

Fidelity may charge a FEE FOR CERTAIN SERVICES, such as providing
historical account documents.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

Each fund earns interest, dividends, and other income from its
investments, and distributes this income (less expenses) to
shareholders as dividends. Each fund may also realize capital gains
from its investments, and distributes these gains (less losses), if
any, to shareholders as capital gain distributions.

The bond fund normally declares dividends daily and pays them monthly.
The bond fund normally pays capital gain distributions in March
and December.

Distributions you receive from each money market fund consist
primarily of dividends. Each money market fund normally declares
dividends daily and pays them monthly.

EARNING DIVIDENDS

For Spartan Massachusetts Municipal Money Market and Spartan
Massachusetts Municipal Income, shares begin to earn dividends on the
first business day following the day of purchase.

For Massachusetts Municipal Money Market, shares purchased by a wire
order prior to 10:00 a.m. Eastern time, with receipt of the
wire in proper form before the close of the Federal Reserve Wire
System on that day, generally begin to earn dividends on the day of
purchase. Shares purchased by all other orders begin to earn dividends
on the first business day following the day of purchase.

However, on any day that the principal bond markets close early (as
recommended by the Bond Market Association) or the Federal Reserve
Bank of New York (New York Fed ) closes early, Massachusetts
Municipal Money Market may advance the time on that day by which
wire purchase orders must be placed so that shares earn dividends
on the day of purchase. In addition, on any day that the principal
bond markets do not open (as recommended by the Bond Market
Association) or the New York Fed does not open, shares begin to
earn dividends on the first business day following the day of
purchase.

For Spartan Massachusetts Municipal Money Market and Spartan
Massachusetts Municipal Income, shares earn dividends until, but not
including, the next business day following the day of redemption.

For Massachusetts Municipal Money Market, shares redeemed by wire
order prior to 10:00 a.m. Eastern time generally earn dividends
through the day prior to the day of redemption. Shares redeemed by all
other orders earn dividends until, but not including, the next
business day following the day of redemption.

However, on any day that the principal bond markets close early (as
recommended by the Bond Market Association) or the New York Fed
closes early, Massachusetts Municipal Money Market may set a time
after which shares redeemed by wire order earn dividends until, but
not including, the next business day following the day of redemption.
On any day that the principal bond markets do not open (as recommended
by the Bond Market Association) or the New York Fed does not
open, shares earn dividends until, but not including, the next
business day following the day of redemption.

DISTRIBUTION OPTIONS

When you open an account, specify on your application how you want to
receive your distributions. The following options may be available for
each fund's distributions:

1. REINVESTMENT OPTION. Your dividends and capital gain
distributions, if any, will be automatically reinvested in
additional shares of the fund. If you do not indicate a choice on your
application, you will be assigned this option.

2. INCOME-EARNED OPTION. (bond fund only) Your capital gain
distributions will be automatically reinvested in additional
shares of the fund. Your dividends will be paid in cash.

3. CASH OPTION. Your dividends and capital gain distributions,
if any, will be paid in cash.

4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividends
will be automatically invested in shares of another identically
registered Fidelity fund. Your capital gain distributions, if
any, will be automatically invested in shares of another identically
registered Fidelity fund, automatically reinvested in additional
shares of the fund, or paid in cash.

Not all distribution options are available for every account. If the
option you prefer is not listed on your account application, or if you
want to change your current option, call Fidelity.

If you elect to receive distributions paid in cash by check and the
U.S. Postal Service does not deliver your checks, your distribution
option may be converted to the Reinvestment Option. You will not
receive interest on amounts represented by uncashed distribution
checks.

TAX CONSEQUENCES

As with any investment, your investment in a fund could have tax
consequences for you.

TAXES ON DISTRIBUTIONS. Each fund seeks to earn income and pay
dividends exempt from federal income tax and Massachusetts personal
income tax.

A portion of the dividends you receive may be subject to
federal, state, or local income tax or may be subject to
the federal alternative minimum tax. You may also receive taxable
distributions attributable to a fund's sale of municipal bonds.

For federa l tax purposes, each fund's distributions of
short-term capital gains and gains on the sale of bonds characterized
as market discount are taxable to you as ordinary income, while
each fund's distributions of long-term capital gains, if any, are
taxable to you generally as capital gains.

For Massachusetts personal income tax purposes, distributions
derived from interest on municipal securities of Massachusetts issuers
and from interest on qualifying securities issued by U.S. territories
and possessions are generally exempt from tax. Distributions that are
federally taxable as ordinary income or capital gains are generally
subject to Massachusetts personal income tax; however, distributions
that are federally taxable as capital gains and are attributable to
gains on municipal securities of certain Massachusetts issuers are
exempt from Massachusetts personal income tax.

If a fund's distributions exceed its income and capital gains realized
in any year, all or a portion of those distributions may be
treated as a return of capital to shareholders for federal
income tax or Massachusetts personal income tax purposes. A
return of capital generally will not be taxable to you but will
reduce the cost basis of your shares and result in a higher reported
capital gain or a lower reported capital loss when you sell your
shares.

If you buy shares when a fund has realized but not yet distributed
income or capital gains, you will be "buying a dividend" by paying the
full price for the shares and then receiving a portion of the price
back in the form of a potentially taxable distribution.

Any taxable distributions you receive from a fund will normally be
taxable to you when you receive them, regardless of your distribution
option. If you elect to receive distributions in cash or to invest
distributions automatically in shares of another Fidelity fund, you
will receive certain December distributions in January, but those
distributions will be taxable as if you received them on December 31.

TAXES ON TRANSACTIONS. Your bond fund redemptions, including
exchanges, may result in a capital gain or loss for federal and
Massachusetts personal income tax purposes. A capital gain or
loss on your investment in a fund generally is the difference
between the cost of your shares and the price you receive when you
sell them.

FUND SERVICES

FUND MANAGEMENT

Each fund is a mutual fund, an investment that pools shareholders'
money and invests it toward a specified goal.

FMR is each fund's manager.

As of __, FMR had approximately $ __ billion in
discretionary assets under management.

As the manager, FMR is responsible for choosing each fund's
investments and handling its business affairs.

Fidelity Investments Money Management, Inc. (FIMM), in Merrimack, New
Hampshire, serves as sub-adviser for each fund. FIMM is primarily
responsible for choosing investments for each fund.

FIMM is an affiliate of FMR. As of __ , FIMM had approximately
$ ____ in discretionary assets under management.

A fund could be adversely affected if the computer systems used by FMR
and other service providers do not properly process and calculate
date-related information from and after January 1, 2000. FMR has
advised each fund that it is actively working on necessary changes to
its computer systems and expects that its systems, and those of other
major service providers, will be modified prior to January 1, 2000.
However, there can be no assurance that there will be no adverse
impact on a fund.

Christine Thompson is vice president and manager of Spartan
Massachusetts Municipal Income, which she has managed since July 1998.
She also manages other Fidelity funds. Since joining Fidelity in
1985, Ms. Thompson has worked as a senior analyst and portfolio
manager.

From time to time a manager, analyst, or other Fidelity employee
may express views regarding a particular company, security, industry,
or market sector. The views expressed by any such person are the views
of only that individual as of the time expressed and do not
necessarily represent the views of Fidelity or any other person in the
Fidelity organization. Any such views are subject to change at any
time based upon market or other conditions and Fidelity disclaims any
responsibility to update such views. These views may not be relied on
as investment advice and, because investment decisions for a Fidelity
fund are based on numerous factors, may not be relied on as an
indication of trading intent on behalf of any Fidelity fund.

Fidelity investment personnel may invest in securities for their own
investment accounts pursuant to a code of ethics that establishes
procedures for personal investing and restricts certain transactions.

Each fund pays a management fee to FMR. The management fee is
calculated and paid to FMR every month. FMR pays all of the other
expenses of Spartan Massachusetts Municipal Money Market with limited
exceptions. Spartan Massachusetts Municipal Money Market's annual
management fee rate is 0.50% of its average net assets.

For Massachusetts Municipal Money Market and Spartan Massachusetts
Municipal Income, the fee is calculated by adding a group fee rate to
an individual fund fee rate, dividing by twelve, and multiplying the
result by the fund's average net assets throughout the month.

The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.37%, and it
drops as total assets under management increase.

For January 2000, the group fee rate was __ % for
Massachusetts Municipal Money Market and the group fee rate was
__ % for Spartan Massachusetts Municipal Income. The individual
fund fee rate is 0.25% for Massachusetts Municipal Money Market and
Spartan Massachusetts Municipal Income.

The total management fee for the fiscal year ended January 31,
2000, was __% of the fund's average net assets for
Massachusetts Municipal Money Market and __%, after
reimbursement, of the fund's average net assets for Spartan
Massachusetts Municipal Income.

FMR pays FIMM for providing assistance with investment advisory
services.

FMR may, from time to time, agree to reimburse the funds for
management fees and other expenses above a specified limit. FMR
retains the ability to be repaid by a fund if expenses fall below the
specified limit prior to the end of the fiscal year. Reimbursement
arrangements, which may be discontinued by FMR at any time, can
decrease a fund's expenses and boost its performance.

FUND DISTRIBUTION

Fidelity Distributors Corporation (FDC) distributes each fund's
shares.

Each fund has adopted a Distribution and Service Plan pursuant to Rule
12b-1 under the Investment Company Act of 1940 that recognizes that
FMR may use its management fee revenues, as well as its past profits
or its resources from any other source, to pay FDC for expenses
incurred in connection with providing services intended to result in
the sale of fund shares and/or shareholder support services. FMR,
directly or through FDC, may pay intermediaries, such as banks,
broker-dealers and other service-providers, that provide those
services. Currently, the Board of Trustees of each fund has authorized
such payments.

To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.

FMR may allocate brokerage transactions in a manner that takes into
account the sale of shares of a fund, provided that the fund receives
brokerage services and commission rates comparable to those of other
broker-dealers.

No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this prospectus and in the related
statement of additional information (SAI), in connection with the
offer contained in this prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the funds or FDC. This prospectus and the related SAI do
not constitute an offer by the funds or by FDC to sell shares of the
funds to or to buy shares of the funds from any person to whom it is
unlawful to make such offer.

APPENDIX

FINANCIAL HIGHLIGHTS

The financial highlights tables are intended to help you understand
each fund's financial history for the past 5 years. Certain
information reflects financial results for a single fund share. The
total returns in the table represent the rate that an investor would
have earned (or lost) on an investment in the fund (assuming
reinvestment of all dividends and distributions). This information
has been audited by __, independent accountants, whose reports, along
with each fund's financial highlights and financial statements, are
included in each fund's annual report. A free copy of the annual
report is available upon request.

[Financial Highlights to be filed by subsequent amendment.]

You can obtain additional information about the funds. The funds' SAI
includes more detailed information about each fund and its
investments. The SAI is incorporated herein by reference (legally
forms a part of the prospectus). Each fund's annual and
semi-annual reports include a discussion of the fund's holdings
and recent market conditions and the fund's investment
strategies that affected performance.

For a free copy of any of these documents or to request other
information or ask questions about a fund, call Fidelity at
1-800-544-8544. In addition, you may visit Fidelity's Web site
at www.fidelity.com for a free copy of a prospectus or an annual or
semi-annual report or to request other information.

The SAI, the funds' annual and semi-annual reports and other related
materials are available on the SEC's Internet Web site
(http://www.sec.gov). You can obtain copies of this information upon
paying a duplicating fee, by writing the Public Reference Section of
the SEC, Washington, D.C. 20549-6009. You can also review and copy
information about the funds, including the funds' SAI, at the SEC's
Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for
information on the operation of the SEC's Public Reference Room.

INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-3361.

Spartan, Fidelity Investments & (Pyramid) Design, Fidelity
Investments, Fidelity Money Line, Fidelity Automatic Account
Builder, Fidelity On-Line Xpress+, and Directed Dividends are
registered trademarks of FMR Corp.

Portfolio Advisory Services and FAST are service marks of FMR
Corp.

The third party marks appearing above are the marks of their
respective owners.

1.704448.102 MAS-pro-0300

FIDELITY MASSACHUSETTS MUNICIPAL MONEY MARKET FUND,
SPARTAN(registered trademark) MASSACHUSETTS MUNICIPAL MONEY
MARKET FUND
AND
SPARTAN MASSACHUSETTS MUNICIPAL INCOME FUND
FUNDS OF FIDELITY MASSACHUSETTS MUNICIPAL TRUST
STATEMENT OF ADDITIONAL INFORMATION
MARCH 25, 2000
This statement of additional information (SAI) is not a prospectus.
Portions of the funds' annual report are incorporated herein. The
annual report is supplied with this SAI.

To obtain a free additional copy of the prospectus, dated March 25,
2000 , or an annual report, please call Fidelity(registered
trademark) at 1-800-544-8544 or visit Fidelity's Web site at
www.fidelity.com.

TABLE OF CONTENTS PAGE

Investment Policies and 20
Limitations

Special Considerations 26
Regarding Massachusetts

Special Considerations
Regarding Puerto Rico

Portfolio Transactions 30

Valuation 33

Performance 33

Additional Purchase, Exchange 44
and Redemption Information

Distributions and Taxes 44

Trustees and Officers 44

Control of Investment Advisers 48

Management Contracts 48

Distribution Services 54

Transfer and Service Agent 54
Agreements

Description of the Trust 55

Financial Statements 55

Appendix 55

MAS-ptb-0300
1.472628.102

(fidelity_logo_graphic)(registered trademark)
82 Devonshire Street, Boston, MA 02109

INVESTMENT POLICIES AND LIMITATIONS

The following policies and limitations supplement those set forth in
the prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of a fund's assets that may
be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation
will be determined immediately after and as a result of the fund's
acquisition of such security or other asset. Accordingly, any
subsequent change in values, net assets, or other circumstances will
not be considered when determining whether the investment complies
with the fund's investment policies and limitations.

A fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the
1940 Act)) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations
described in this SAI are not fundamental and may be changed without
shareholder approval.

INVESTMENT LIMITATIONS OF FIDELITY MASSACHUSETTS MUNICIPAL
MONEY MARKET FUND

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:

(1) purchase the securities of any issuer if, as a result, the fund
would not comply with any applicable diversification requirements for
a money market fund under the Investment Company Act of 1940 and the
rules thereunder, as such may be amended from time to time;

(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;

(3) make short sales;

(4) purchase any securities on margin, except for such short-term
credits as are necessary for the clearance of transactions;

(5) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;

(6) underwrite any issue of securities, except to the extent that the
purchase of municipal bonds in accordance with the fund's investment
objective, policies, and limitations, either directly from the issuer,
or from an underwriter for an issuer, may be deemed to be
underwriting;

(7) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or tax-exempt obligations issued or guaranteed by a
U.S. territory or possession or a state or local government, or a
political subdivision of any of the foregoing) if, as a result, more
than 25% of the fund's total assets would be invested in securities of
companies whose principal business activities are in the same
industry;

(8) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);

(9) purchase or sell commodities or commodities (futures) contracts;

(10) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limit does not apply to purchases of debt securities or to
repurchase agreements;

(11) invest in oil, gas, or other mineral exploration or development
programs; or

(12) invest in companies for the purpose of exercising control or
management.

(13) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.

THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.

(i) With respect to 75% of its total assets, the fund does not
currently intend to purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities, or securities of other money market
funds) if, as a result, more than 5% of the fund's total assets would
be invested in the securities of that issuer.

(ii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (5)).

(iii) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.

(iv) The fund does not currently intend to engage in repurchase
agreements or make loans, but this limitation does not apply to
purchases of debt securities.

(v) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.

For purposes of normally investing at least 65% of the fund's total
assets in municipal securities whose interest is exempt from
Massachusetts personal income tax, FMR interprets "total assets" to
exclude collateral received for securities lending transactions.

For purposes of limitations (1),(7) and (i), FMR identifies the issuer
of a security depending on its terms and conditions. In identifying
the issuer, FMR will consider the entity or entities responsible for
payment of interest and repayment of principal and the source of such
payments; the way in which assets and revenues of an issuing political
subdivision are separated from those of other political entities; and
whether a governmental body is guaranteeing the security.

For purposes of limitation (i), certain securities subject to
guarantees (including insurance, letters of credit and demand
features) are not considered securities of their issuer, but are
subject to separate diversification requirements, in accordance with
industry standard requirements for money market funds.

With respect to limitation (iii), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets were invested in illiquid securities, it
would consider appropriate steps to protect liquidity.

INVESTMENT LIMITATIONS OF SPARTAN MASSACHUSETTS MUNICIPAL MONEY
MARKET FUND

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:

(3) sell securities short, unless it owns or has the right to obtain
securities equivalent in kind and amount to the securities sold short;

(4) purchase securities on margin, except that the fund may obtain
such short-term credits as are necessary for the clearance of
transactions;

(6) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;

(9) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments; or

(10) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties (for
this purpose, purchasing debt securities and engaging in repurchase
agreements do not constitute lending).

(11) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.

THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.

(iv) The fund does not currently intend to engage in repurchase
agreements or make loans, but this limitation does not apply to
purchases of debt securities.

For purposes of limitations (1), (7) and (i), FMR identifies the
issuer of a security depending on its terms and conditions. In
identifying the issuer, FMR will consider the entity or entities
responsible for payment of interest and repayment of principal and the
source of such payments; the way in which assets and revenues of an
issuing political subdivision are separated from those of other
political entities; and whether a governmental body is guaranteeing
the security.

INVESTMENT LIMITATIONS OF SPARTAN MASSACHUSETTS MUNICIPAL INCOME
FUND

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:

(1) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;

(2) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;

(3) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;

(4) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or tax-exempt obligations issued or guaranteed by a
U.S. territory or possession or a state or local government, or a
political subdivision of any of the foregoing) if, as a result, more
than 25% of the fund's total assets would be invested in securities of
companies whose principal business activities are in the same
industry;

(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);

(6) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities);

(7) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements;

(8) invest in companies for the purpose of exercising control or
management.

(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.

THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.

(i) In order to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended, the
fund currently intends to comply with certain diversification limits
imposed by Subchapter M.

(ii) The fund does not currently intend to sell securities short
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.

(iii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.

(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (2)).

(v) The fund does not currently intend to purchase any security if, as
a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.

(vi) The fund does not currently intend to engage in repurchase
agreements or make loans, but this limitation does not apply to
purchases of debt securities.

(vii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
with substantially the same fundamental investment objective,
policies, and limitations as the fund.

For purposes of limitation (i), Subchapter M generally requires the
fund to invest no more than 25% of its total assets in securities of
any one issuer and to invest at least 50% of its assets so that no
more than 5% of the fund's total assets are invested in securities of
any one issuer. However, Subchapter M allows unlimited investments in
cash, cash items, government securities (as defined in Subchapter M)
and securities of other investment companies. These tax requirements
are generally applied at the end of each quarter of the fund's taxable
year.

For purposes of limitations (4) and (i), FMR identifies the issuer of
a security depending on its terms and conditions. In identifying the
issuer, FMR will consider the entity or entities responsible for
payment of interest and repayment of principal and the source of such
payments; the way in which assets and revenues of an issuing political
subdivision are separated from those of other political entities; and
whether a governmental body is guaranteeing the security.

With respect to limitation (v), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets were invested in illiquid securities, it
would consider appropriate steps to protect liquidity.

For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page .

The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. FMR may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help a fund achieve
its goal.

AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These
transactions may involve repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the Securities and Exchange Commission (SEC), the Board of Trustees
has established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.

ASSET-BACKED SECURITIES represent interests in pools of purchase
contracts, financing leases, or sales agreements entered into by
municipalities. Payment of interest and repayment of principal may be
largely dependent upon the cash flows generated by the assets backing
the securities and, in certain cases, supported by letters of credit,
surety bonds, or other credit enhancements. Asset-backed security
values may also be affected by other factors including changes in
interest rates, the availability of information concerning the pool
and its structure, the creditworthiness of the servicing agent for the
pool, the originator of the loans or receivables, or the entities
providing the credit enhancement. In addition, these securities may be
subject to prepayment risk.

BORROWING. Each fund may borrow from banks or from other funds advised
by FMR or its affiliates, or through reverse repurchase agreements. If
a fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. If a fund makes
additional investments while borrowings are outstanding, this may be
considered a form of leverage.

CASH MANAGEMENT. A fund can hold uninvested cash or can invest it in
cash equivalents such as money market securities, repurchase
agreements or shares of money market funds. Generally, these
securities offer less potential for gains than other types of
securities.

CENTRAL CASH FUNDS are money market funds managed by FMR or its
affiliates that seek to earn a high level of current income (free from
federal income tax in the case of a municipal money market fund) while
maintaining a stable $1.00 share price. The funds comply with
industry-standard requirements for money market funds regarding the
quality, maturity, and diversification of their investments.

DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value
of each investment by the time remaining to its maturity, adding these
calculations, and then dividing the total by the value of the fund's
portfolio. An obligation's maturity is typically determined on a
stated final maturity basis, although there are some exceptions to
this rule.

For example, if it is probable that the issuer of an instrument will
take advantage of a maturity-shortening device, such as a call,
refunding, or redemption provision, the date on which the instrument
will probably be called, refunded, or redeemed may be considered to be
its maturity date. When a municipal bond issuer has committed to call
an issue of bonds and has established an independent escrow account
that is sufficient to, and is pledged to, refund that issue, the
number of days to maturity for the prerefunded bond is considered to
be the number of days to the announced call date of the bonds.

FUTURES AND OPTIONS. The following paragraphs pertain to futures and
options: Combined Positions, Correlation of Price Changes, Futures
Contracts, Futures Margin Payments, Limitations on Futures and Options
Transactions, Liquidity of Options and Futures Contracts, OTC Options,
Purchasing Put and Call Options, and Writing Put and Call Options.

COMBINED POSITIONS involve purchasing and writing options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the
overall position. For example, purchasing a put option and writing a
call option on the same underlying instrument would construct a
combined position whose risk and return characteristics are similar to
selling a futures contract. Another possible combined position would
involve writing a call option at one strike price and buying a call
option at a lower price, to reduce the risk of the written call option
in the event of a substantial price increase. Because combined options
positions involve multiple trades, they result in higher transaction
costs and may be more difficult to open and close out.

CORRELATION OF PRICE CHANGES. Because there are a limited number of
types of exchange-traded options and futures contracts, it is likely
that the standardized contracts available will not match a fund's
current or anticipated investments exactly. A fund may invest in
options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in
which the fund typically invests, which involves a risk that the
options or futures position will not track the performance of the
fund's other investments.

Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a
fund's investments well. Options and futures prices are affected by
such factors as current and anticipated short-term interest rates,
changes in volatility of the underlying instrument, and the time
remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result
from differing levels of demand in the options and futures markets and
the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price
fluctuation limits or trading halts. A fund may purchase or sell
options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to
attempt to compensate for differences in volatility between the
contract and the securities, although this may not be successful in
all cases. If price changes in a fund's options or futures positions
are poorly correlated with its other investments, the positions may
fail to produce anticipated gains or result in losses that are not
offset by gains in other investments.

FUTURES CONTRACTS. In purchasing a futures contract, the buyer agrees
to purchase a specified underlying instrument at a specified future
date. In selling a futures contract, the seller agrees to sell a
specified underlying instrument at a specified future date. The price
at which the purchase and sale will take place is fixed when the buyer
and seller enter into the contract. Some currently available futures
contracts are based on specific securities, such as U.S. Treasury
bonds or notes, and some are based on indices of securities prices,
such as the Bond Buyer Municipal Bond Index. Futures can be held until
their delivery dates, or can be closed out before then if a liquid
secondary market is available.

The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore,
purchasing futures contracts will tend to increase a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a fund sells a futures contract, by contrast, the value
of its futures position will tend to move in a direction contrary to
the market. Selling futures contracts, therefore, will tend to offset
both positive and negative market price changes, much as if the
underlying instrument had been sold.

FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract
is not required to deliver or pay for the underlying instrument unless
the contract is held until the delivery date. However, both the
purchaser and seller are required to deposit "initial margin" with a
futures broker, known as a futures commission merchant (FCM), when the
contract is entered into. Initial margin deposits are typically equal
to a percentage of the contract's value. If the value of either
party's position declines, that party will be required to make
additional "variation margin" payments to settle the change in value
on a daily basis. The party that has a gain may be entitled to receive
all or a portion of this amount. Initial and variation margin payments
do not constitute purchasing securities on margin for purposes of a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a fund, the fund may be entitled to
return of margin owed to it only in proportion to the amount received
by the FCM's other customers, potentially resulting in losses to the
fund.

LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The bond fund has
filed a notice of eligibility for exclusion from the definition of the
term "commodity pool operator" with the Commodity Futures Trading
Commission (CFTC) and the National Futures Association, which regulate
trading in the futures markets . The fund intends to comply with Rule
4.5 under the Commodity Exchange Act, which limits the extent to which
the fund can commit assets to initial margin deposits and option
premiums.

In addition, the bond fund will not: (a) sell futures contracts,
purchase put options, or write call options if, as a result, more than
25% of the fund's total assets would be hedged with futures and
options under normal conditions; (b) purchase futures contracts or
write put options if, as a result, the fund's total obligations upon
settlement or exercise of purchased futures contracts and written put
options would exceed 25% of its total assets; or (c) purchase call
options if, as a result, the current value of option premiums for call
options purchased by the fund would exceed 5% of the fund's total
assets. These limitations do not apply to options attached to or
acquired or traded together with their underlying securities, and do
not apply to securities that incorporate features similar to options.

The above limitations on the bond fund's investments in futures
contracts and options, and the fund's policies regarding futures
contracts and options discussed elsewhere in this SAI, may be changed
as regulatory agencies permit.

LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or
futures contract at any particular time. Options may have relatively
low trading volume and liquidity if their strike prices are not close
to the underlying instrument's current price. In addition, exchanges
may establish daily price fluctuation limits for options and futures
contracts, and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days
when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible to enter into new positions or close out
existing positions. If the secondary market for a contract is not
liquid because of price fluctuation limits or otherwise, it could
prevent prompt liquidation of unfavorable positions, and potentially
could require a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a fund's
access to other assets held to cover its options or futures positions
could also be impaired.

OTC OPTIONS. Unlike exchange-traded options, which are standardized
with respect to the underlying instrument, expiration date, contract
size, and strike price, the terms of over-the-counter (OTC) options
(options not traded on exchanges) generally are established through
negotiation with the other party to the option contract. While this
type of arrangement allows the purchaser or writer greater flexibility
to tailor an option to its needs, OTC options generally involve
greater credit risk than exchange-traded options, which are guaranteed
by the clearing organization of the exchanges where they are traded.

PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
purchaser obtains the right (but not the obligation) to sell the
option's underlying instrument at a fixed strike price. In return for
this right, the purchaser pays the current market price for the option
(known as the option premium). Options have various types of
underlying instruments, including specific securities, indices of
securities prices, and futures contracts. The purchaser may terminate
its position in a put option by allowing it to expire or by exercising
the option. If the option is allowed to expire, the purchaser will
lose the entire premium. If the option is exercised, the purchaser
completes the sale of the underlying instrument at the strike price. A
purchaser may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary
market exists.

The buyer of a typical put option can expect to realize a gain if
security prices fall substantially. However, if the underlying
instrument's price does not fall enough to offset the cost of
purchasing the option, a put buyer can expect to suffer a loss
(limited to the amount of the premium, plus related transaction
costs).

The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right
to purchase, rather than sell, the underlying instrument at the
option's strike price. A call buyer typically attempts to participate
in potential price increases of the underlying instrument with risk
limited to the cost of the option if security prices fall. At the same
time, the buyer can expect to suffer a loss if security prices do not
rise sufficiently to offset the cost of the option.

WRITING PUT AND CALL OPTIONS. The writer of a put or call option takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the writer assumes the obligation
to pay the strike price for the option's underlying instrument if the
other party to the option chooses to exercise it. The writer may seek
to terminate a position in a put option before exercise by closing out
the option in the secondary market at its current price. If the
secondary market is not liquid for a put option, however, the writer
must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes. When writing an option on
a futures contract, a fund will be required to make margin payments to
an FCM as described above for futures contracts.

If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it
is likely that the writer will also profit, because it should be able
to close out the option at a lower price. If security prices fall, the
put writer would expect to suffer a loss. This loss should be less
than the loss from purchasing the underlying instrument directly,
however, because the premium received for writing the option should
mitigate the effects of the decline.

Writing a call option obligates the writer to sell or deliver the
option's underlying instrument, in return for the strike price, upon
exercise of the option. The characteristics of writing call options
are similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall.
Through receipt of the option premium, a call writer mitigates the
effects of a price decline. At the same time, because a call writer
must be prepared to deliver the underlying instrument in return for
the strike price, even if its current value is greater, a call writer
gives up some ability to participate in security price increases.

ILLIQUID SECURITIES cannot be sold or disposed of in the ordinary
course of business at approximately the prices at which they are
valued. Difficulty in selling securities may result in a loss or may
be costly to a fund. Under the supervision of the Board of Trustees,
FMR determines the liquidity of a fund's investments and, through
reports from FMR, the Board monitors investments in illiquid
securities. In determining the liquidity of a fund's investments, FMR
may consider various factors, including (1) the frequency and volume
of trades and quotations, (2) the number of dealers and prospective
purchasers in the marketplace, (3) dealer undertakings to make a
market, and (4) the nature of the security and the market in which it
trades (including any demand, put or tender features, the mechanics
and other requirements for transfer, any letters of credit or other
credit enhancement features, any ratings, the number of holders, the
method of soliciting offers, the time required to dispose of the
security, and the ability to assign or offset the rights and
obligations of the security).

INDEXED SECURITIES are instruments whose prices are indexed to the
prices of other securities, securities indices, or other financial
indicators. Indexed securities typically, but not always, are debt
securities or deposits whose value at maturity or coupon rate is
determined by reference to a specific instrument or statistic. Indexed
securities may have principal payments as well as coupon payments that
depend on the performance of one or more interest rates. Their coupon
rates or principal payments may change by several percentage points
for every 1% interest rate change.

The performance of indexed securities depends to a great extent on the
performance of the security or other instrument to which they are
indexed, and may also be influenced by interest rate changes. Indexed
securities may be more volatile than the underlying instruments.
Indexed securities are also subject to the credit risks associated
with the issuer of the security, and their values may decline
substantially if the issuer's creditworthiness deteriorates.

INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates; however, municipal
funds currently intend to participate in this program only as
borrowers. A fund will borrow through the program only when the costs
are equal to or lower than the costs of bank loans. Interfund
borrowings normally extend overnight, but can have a maximum duration
of seven days. Loans may be called on one day's notice. A fund may
have to borrow from a bank at a higher interest rate if an interfund
loan is called or not renewed.

INVERSE FLOATERS have variable interest rates that typically move in
the opposite direction from movements in prevailing short-term
interest rate levels - rising when prevailing short-term interest
rates fall, and vice versa. The prices of inverse floaters can be
considerably more volatile than the prices of bonds with comparable
maturities.

INVESTMENT-GRADE DEBT SECURITIES. Investment-grade debt securities are
medium and high-quality securities. Some may possess speculative
characteristics and may be more sensitive to economic changes and to
changes in the financial conditions of issuers. A debt security is
considered to be investment-grade if it is rated investment-grade by
Moody's Investors Service, Standard & Poor's, Duff & Phelps Credit
Rating Co., or Fitch IBCA Inc., or is unrated but considered to be of
equivalent quality by FMR.

LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities have poor
protection with respect to the payment of interest and repayment of
principal, or may be in default. These securities are often considered
to be speculative and involve greater risk of loss or price changes
due to changes in the issuer's capacity to pay. The market prices of
lower-quality debt securities may fluctuate more than those of
higher-quality debt securities and may decline significantly in
periods of general economic difficulty, which may follow periods of
rising interest rates.

The market for lower-quality debt securities may be thinner and less
active than that for higher-quality debt securities, which can
adversely affect the prices at which the former are sold. Adverse
publicity and changing investor perceptions may affect the liquidity
of lower-quality debt securities and the ability of outside pricing
services to value lower-quality debt securities.

A fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security
holder to seek to protect the interests of security holders if it
determines this to be in the best interest of the fund's shareholders.

MONEY MARKET INSURANCE. Each money market fund participates in a
mutual insurance company solely with other funds advised by FMR or its
affiliates. This company provides insurance coverage for losses on
certain money market instruments held by a participating fund
(eligible instruments), including losses from nonpayment of principal
or interest or a bankruptcy or insolvency of the issuer or credit
support provider, if any. The insurance does not cover losses
resulting from changes in interest rates or other market developments.
Each money market fund is charged an annual premium for the insurance
coverage and may be subject to a special assessment of up to
approximately two and one-half times the fund's annual gross premium
if covered losses exceed certain levels. A participating fund may
recover no more than $100 million annually, including all other claims
of insured funds, and may only recover if the amount of the loss
exceeds 0.30% of its eligible instruments. Each money market fund may
incur losses regardless of the insurance.

MONEY MARKET SECURITIES are high-quality, short-term obligations.
Money market securities may be structured to be, or may employ a trust
or other form so that they are, eligible investments for money market
funds. For example, put features can be used to modify the maturity of
a security or interest rate adjustment features can be used to enhance
price stability. If a structure fails to function as intended, adverse
tax or investment consequences may result. Neither the Internal
Revenue Service (IRS) nor any other regulatory authority has ruled
definitively on certain legal issues presented by certain structured
securities. Future tax or other regulatory determinations could
adversely affect the value, liquidity, or tax treatment of the income
received from these securities or the nature and timing of
distributions made by the funds.

MUNICIPAL INSURANCE. A municipal bond may be covered by insurance that
guarantees the bond's scheduled payment of interest and repayment of
principal. This type of insurance may be obtained by either (i) the
issuer at the time the bond is issued (primary market insurance), or
(ii) another party after the bond has been issued (secondary market
insurance).

Both primary and secondary market insurance guarantee timely and
scheduled repayment of all principal and payment of all interest on a
municipal bond in the event of default by the issuer, and cover a
municipal bond to its maturity, enhancing its credit quality and
value.

Municipal bond insurance does not insure against market fluctuations
or fluctuations in a fund's share price. In addition, a municipal bond
insurance policy will not cover: (i) repayment of a municipal bond
before maturity (redemption), (ii) prepayment or payment of an
acceleration premium (except for a mandatory sinking fund redemption)
or any other provision of a bond indenture that advances the maturity
of the bond, or (iii) nonpayment of principal or interest caused by
negligence or bankruptcy of the paying agent. A mandatory sinking fund
redemption may be a provision of a municipal bond issue whereby part
of the municipal bond issue may be retired before maturity.

Because a significant portion of the municipal securities issued and
outstanding is insured by a small number of insurance companies, an
event involving one or more of these insurance companies could have a
significant adverse effect on the value of the securities insured by
that insurance company and on the municipal markets as a whole.

FMR may decide to retain an insured municipal bond that is in default,
or, in FMR's view, in significant risk of default. While a fund holds
a defaulted, insured municipal bond, the fund collects interest
payments from the insurer and retains the right to collect principal
from the insurer when the municipal bond matures, or in connection
with a mandatory sinking fund redemption.

PRINCIPAL MUNICIPAL BOND INSURERS. The various insurance companies
providing primary and secondary market insurance policies for
municipal bonds are described below. Ratings reflect each respective
rating agency's assessment of the creditworthiness of an insurer and
the insurer's ability to pay claims on its insurance policies at the
time of the assessment.

Ambac Assurance Corp., a wholly-owned subsidiary of Ambac Financial
Group Inc., is authorized to provide bond insurance in the 50 U.S.
states, the District of Columbia, and the Commonwealth of Puerto Rico.
Bonds insured by Ambac Assurance Corp. are rated "Aaa" by Moody's
Investor Service and "AAA" by Standard & Poor's.

Connie Lee Insurance Co. is a wholly-owned subsidiary of Connie Lee
Holdings Inc., which is a wholly-owned subsidiary of Ambac Assurance
Corp. All losses incurred by Connie Lee Insurance Co. that would cause
its statutory capital to drop below $75 million would be covered by
Ambac Assurance Corp. Connie Lee Insurance Co. is authorized to
provide bond insurance in 49 U.S. states, the District of Columbia,
and the Commonwealth of Puerto Rico. Bonds insured by Connie Lee
Insurance Co. are rated "AAA" by Standard & Poor's.

Financial Guaranty Insurance Co. (FGIC), a wholly-owned subsidiary of
GE Capital Services, is authorized to provide bond insurance in the 50
U.S. states and the District of Columbia. Bonds insured by FGIC are
rated "Aaa" by Moody's Investor Service and "AAA" by Standard &
Poor's.

Financial Security Assurance Inc. (FSA), a wholly-owned subsidiary of
Financial Security Assurance Holdings Ltd., is authorized to provide
bond insurance in 49 U.S. states, the District of Columbia, and three
U.S. territories. Bonds insured by FSA are rated "Aaa" by Moody's
Investor Service and "AAA" by Standard & Poor's.

Municipal Bond Investors Assurance Corp. (MBIA Insurance Corp.), a
wholly-owned subsidiary of MBIA Inc., a publicly-owned company, is
authorized to provide bond insurance in the 50 U.S. states, the
District of Columbia, and the Commonwealth of Puerto Rico. Bonds
insured by MBIA Insurance Corp. are rated "Aaa" by Moody's Investor
Service and "AAA" by Standard & Poor's.

MUNICIPAL LEASES and participation interests therein may take the form
of a lease, an installment purchase, or a conditional sale contract
and are issued by state and local governments and authorities to
acquire land or a wide variety of equipment and facilities. Generally,
a fund will not hold these obligations directly as a lessor of the
property, but will purchase a participation interest in a municipal
obligation from a bank or other third party. A participation interest
gives the purchaser a specified, undivided interest in the obligation
in proportion to its purchased interest in the total amount of the
issue.

Municipal leases frequently have risks distinct from those associated
with general obligation or revenue bonds. State constitutions and
statutes set forth requirements that states or municipalities must
meet to incur debt. These may include voter referenda, interest rate
limits, or public sale requirements. Leases, installment purchases, or
conditional sale contracts (which normally provide for title to the
leased asset to pass to the governmental issuer) have evolved as a
means for governmental issuers to acquire property and equipment
without meeting their constitutional and statutory requirements for
the issuance of debt. Many leases and contracts include
"non-appropriation clauses" providing that the governmental issuer has
no obligation to make future payments under the lease or contract
unless money is appropriated for such purposes by the appropriate
legislative body on a yearly or other periodic basis.
Non-appropriation clauses free the issuer from debt issuance
limitations. If a municipality stops making payments or transfers its
obligations to a private entity, the obligation could lose value or
become taxable.

MUNICIPAL MARKET DISRUPTION RISK. The value of municipal securities
may be affected by uncertainties in the municipal market related to
legislation or litigation involving the taxation of municipal
securities or the rights of municipal securities holders in the event
of a bankruptcy. Proposals to restrict or eliminate the federal income
tax exemption for interest on municipal securities are introduced
before Congress from time to time. Proposals also may be introduced
before the Massachusetts legislature that would affect the state tax
treatment of a municipal fund's distributions. If such proposals were
enacted, the availability of municipal securities and the value of a
municipal fund's holdings would be affected and the Trustees would
reevaluate the fund's investment objectives and policies. Municipal
bankruptcies are relatively rare, and certain provisions of the U.S.
Bankruptcy Code governing such bankruptcies are unclear and remain
untested. Further, the application of state law to municipal issuers
could produce varying results among the states or among municipal
securities issuers within a state. These legal uncertainties could
affect the municipal securities market generally, certain specific
segments of the market, or the relative credit quality of particular
securities. Any of these effects could have a significant impact on
the prices of some or all of the municipal securities held by a fund,
making it more difficult for a money market fund to maintain a stable
net asset value per share (NAV).

EDUCATION. In general, there are two types of education-related
bonds; those issued to finance projects for public and private
colleges and universities, and those representing pooled interests in
student loans. Bonds issued to supply educational institutions with
funds are subject to the risk of unanticipated revenue decline,
primarily the result of decreasing student enrollment or decreasing
state and federal funding. Among the factors that may lead to
declining or insufficient revenues are restrictions on students'
ability to pay tuition, availability of state and federal funding, and
general economic conditions. Student loan revenue bonds are generally
offered by state (or substate) authorities or commissions and are
backed by pools of student loans. Underlying student loans may be
guaranteed by state guarantee agencies and may be subject to
reimbursement by the United States Department of Education through its
guaranteed student loan program. Others may be private, uninsured
loans made to parents or students which are supported by reserves or
other forms of credit enhancement. Recoveries of principal due to loan
defaults may be applied to redemption of bonds or may be used to
re-lend, depending on program latitude and demand for loans. Cash
flows supporting student loan revenue bonds are impacted by numerous
factors, including the rate of student loan defaults, seasoning of the
loan portfolio, and student repayment deferral periods of forbearance.
Other risks associated with student loan revenue bonds include
potential changes in federal legislation regarding student loan
revenue bonds, state guarantee agency reimbursement and continued
federal interest and other program subsidies currently in effect.

HEALTH CARE. The health care industry is subject to regulatory action
by a number of private and governmental agencies, including federal,
state, and local governmental agencies. A major source of revenues for
the health care industry is payments from the Medicare and Medicaid
programs. As a result, the industry is sensitive to legislative
changes and reductions in governmental spending for such programs.
Numerous other factors may affect the industry, such as general and
local economic conditions; demand for services; expenses (including
malpractice insurance premiums); and competition among health care
providers. In the future, the following elements may adversely affect
health care facility operations: adoption of legislation proposing a
national health insurance program; other state or local health care
reform measures; medical and technological advances which dramatically
alter the need for health services or the way in which such services
are delivered; changes in medical coverage which alter the traditional
fee-for-service revenue stream; and efforts by employers, insurers,
and governmental agencies to reduce the costs of health insurance and
health care services.

WATER AND SEWER. Water and sewer revenue bonds are often considered
to have relatively secure credit as a result of their issuer's
importance, monopoly status, and generally unimpeded ability to raise
rates. Despite this, lack of water supply due to insufficient rain,
run-off, or snow pack is a concern that has led to past defaults.
Further, public resistance to rate increases, costly environmental
litigation, and Federal environmental mandates are challenges faced by
issuers of water and sewer bonds.

PUT FEATURES entitle the holder to sell a security back to the issuer
or a third party at any time or at specified intervals. In exchange
for this benefit, a fund may accept a lower interest rate. Securities
with put features are subject to the risk that the put provider is
unable to honor the put feature (purchase the security). Put providers
often support their ability to buy securities on demand by obtaining
letters of credit or other guarantees from other entities. Demand
features, standby commitments, and tender options are types of put
features.

REFUNDING CONTRACTS. Securities may be purchased on a when-issued
basis in connection with the refinancing of an issuer's outstanding
indebtedness. Refunding contracts require the issuer to sell and a
purchaser to buy refunded municipal obligations at a stated price and
yield on a settlement date that may be several months or several years
in the future. A purchaser generally will not be obligated to pay the
full purchase price if the issuer fails to perform under a refunding
contract. Instead, refunding contracts generally provide for payment
of liquidated damages to the issuer. A purchaser may secure its
obligations under a refunding contract by depositing collateral or a
letter of credit equal to the liquidated damages provisions of the
refunding contract.

REPURCHASE AGREEMENTS involve an agreement to purchase a security and
to sell that security back to the original seller at an agreed-upon
price. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate
or maturity of the purchased security. As protection against the risk
that the original seller will not fulfill its obligation, the
securities are held in a separate account at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus
the accrued incremental amount. The value of the security purchased
may be more or less than the price at which the counterparty has
agreed to purchase the security. In addition, delays or losses could
result if the other party to the agreement defaults or becomes
insolvent. The funds will engage in repurchase agreement transactions
with parties whose creditworthiness has been reviewed and found
satisfactory by FMR.

RESTRICTED SECURITIES are subject to legal restrictions on their sale.
Difficulty in selling securities may result in a loss or be costly to
a fund. Restricted securities generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration
under the Securities Act of 1933, or in a registered public offering.
Where registration is required, the holder of a registered security
may be obligated to pay all or part of the registration expense and a
considerable period may elapse between the time it decides to seek
registration and the time it may be permitted to sell a security under
an effective registration statement. If, during such a period, adverse
market conditions were to develop, the holder might obtain a less
favorable price than prevailed when it decided to seek registration of
the security.

REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. The funds will enter into
reverse repurchase agreements with parties whose creditworthiness has
been reviewed and found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of fund assets and a fund's
yield and may be viewed as a form of leverage.

SOURCES OF LIQUIDITY OR CREDIT SUPPORT . Issuers may employ
various forms of credit and liquidity enhancements, including letters
of credit, guarantees, puts, and demand features, and insurance
provided by domestic or foreign entities such as banks and other
financial institutions. FMR may rely on its evaluation of the credit
of the liquidity or credit enhancement provider in determining
whether to purchase a security supported by such enhancement. In
evaluating the credit of a foreign bank or other foreign entities, FMR
will consider whether adequate public information about the entity is
available and whether the entity may be subject to unfavorable
political or economic developments, currency controls, or other
government restrictions that might affect its ability to honor its
commitment. Changes in the credit quality of the entity providing the
enhancement could affect the value of the security or a fund's share
price.

STANDBY COMMITMENTS are puts that entitle holders to same-day
settlement at an exercise price equal to the amortized cost of the
underlying security plus accrued interest, if any, at the time of
exercise. A fund may acquire standby commitments to enhance the
liquidity of portfolio securities.

Ordinarily a fund will not transfer a standby commitment to a third
party, although it could sell the underlying municipal security to a
third party at any time. A fund may purchase standby commitments
separate from or in conjunction with the purchase of securities
subject to such commitments. In the latter case, the fund would pay a
higher price for the securities acquired, thus reducing their yield to
maturity.

Issuers or financial intermediaries may obtain letters of credit or
other guarantees to support their ability to buy securities on demand.
FMR may rely upon its evaluation of a bank's credit in determining
whether to purchase an instrument supported by a letter of credit. In
evaluating a foreign bank's credit, FMR will consider whether adequate
public information about the bank is available and whether the bank
may be subject to unfavorable political or economic developments,
currency controls, or other governmental restrictions that might
affect the bank's ability to honor its credit commitment.

Standby commitments are subject to certain risks, including the
ability of issuers of standby commitments to pay for securities at the
time the commitments are exercised; the fact that standby commitments
are not generally marketable; and the possibility that the maturities
of the underlying securities may be different from those of the
commitments.

TEMPORARY DEFENSIVE POLICIES. Each fund reserves the right to invest
without limitation in short-term instruments, to hold a substantial
amount of uninvested cash, or to invest more than normally permitted
in taxable obligations for temporary, defensive purposes.

TENDER OPTION BONDS are created by coupling an intermediate- or
long-term, fixed-rate, municipal bond (generally held pursuant to a
custodial arrangement) with a tender agreement that gives the holder
the option to tender the bond at its face value. As consideration for
providing the tender option, the sponsor (usually a bank,
broker-dealer, or other financial institution) receives periodic fees
equal to the difference between the bond's fixed coupon rate and the
rate (determined by a remarketing or similar agent) that would cause
the bond, coupled with the tender option, to trade at par on the date
of such determination. After payment of the tender option fee, a fund
effectively holds a demand obligation that bears interest at the
prevailing short-term tax-exempt rate. In selecting tender option
bonds, FMR will consider the creditworthiness of the issuer of the
underlying bond, the custodian, and the third party provider of the
tender option. In certain instances, a sponsor may terminate a tender
option if, for example, the issuer of the underlying bond defaults on
interest payments.

VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments
in the interest rate paid on the security. Variable rate securities
provide for a specified periodic adjustment in the interest rate,
while floating rate securities have interest rates that change
whenever there is a change in a designated benchmark rate. Some
variable or floating rate securities are structured with put features
that permit holders to demand payment of the unpaid principal balance
plus accrued interest from the issuers or certain financial
intermediaries.

In many instances bonds and participation interests have tender
options or demand features that permit the holder to tender (or put)
the bonds to an institution at periodic intervals and to receive the
principal amount thereof. Variable rate instruments structured in this
fashion are considered to be essentially equivalent to other variable
rate securities. The IRS has not ruled whether the interest on these
instruments is tax-exempt. Fixed-rate bonds that are subject to third
party puts and participation interests in such bonds held by a bank in
trust or otherwise may have similar features.

WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS involve a
commitment to purchase or sell specific securities at a predetermined
price or yield in which payment and delivery take place after the
customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered.

When purchasing securities pursuant to one of these transactions, the
purchaser assumes the rights and risks of ownership, including the
risks of price and yield fluctuations and the risk that the security
will not be issued as anticipated. Because payment for the securities
is not required until the delivery date, these risks are in addition
to the risks associated with a fund's investments. If a fund remains
substantially fully invested at a time when a purchase is outstanding,
the purchases may result in a form of leverage. When a fund has sold a
security pursuant to one of these transactions, the fund does not
participate in further gains or losses with respect to the security.
If the other party to a delayed-delivery transaction fails to deliver
or pay for the securities, a fund could miss a favorable price or
yield opportunity or suffer a loss.

A fund may renegotiate a when-issued or forward transaction and may
sell the underlying securities before delivery, which may result in
capital gains or losses for the fund.

ZERO COUPON BONDS do not make interest payments; instead, they are
sold at a discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be more volatile than other types of
fixed-income securities when interest rates change. In calculating a
fund's dividend, a portion of the difference between a zero coupon
bond's purchase price and its face value is considered income.

SPECIAL CONSIDERATIONS REGARDING MASSACHUSETTS

SUMMARY. The Commonwealth of Massachusetts and certain of its cities
and towns and public bodies have experienced financial difficulties
that have adversely affected their credit standing. The recurrence of
such financial difficulties could adversely affect the market value of
the instruments held in the fund s . The information summarized
below describes some of the more significant factors that could affect
the fund s or the ability of the obligors to pay debt service.
The sources of such information are the official statements of issuers
located in the Commonwealth of Massachusetts, as well as other
publicly available documents, and statements of public information
contained in such statements and documents, but FMR is not aware of
facts which would render such information inaccurate.

FISCAL MATTERS. The Commonwealth's operating fund structure satisfies
the requirements of state finance law and is in accordance with
generally accepted accounting principles ("GAAP"), as defined by the
Governmental Accounting Standards Board. The General Fund and those
special revenue funds which are appropriated in the annual state
budget receive most of the non-bond and non-federal grant revenues of
the Commonwealth. These funds are referred to herein as the "budgeted
operating funds" of the Commonwealth. They do not include the capital
projects funds of the Commonwealth, into which the proceeds of
Commonwealth bonds are deposited. The three principal budgeted
operating funds are the General Fund, the Highway Fund and the Local
Aid Fund. Expenditures from these three funds generally account for
approximately 96% of total expenditures of the budgeted operating
funds.

The Commonwealth's budgeted operating funds for fiscal 1994,
1995 , 1996 and 1997 showed an excess of revenues and
other sources over expenditures and other uses of $ 26.8
million, $137 million , $446 million and $221 million and
positive fund balances of $589.3 million, $726 million , $1.172
billion, and $1.394 billion , respectively. Over the same
period, budgeted expenditures were approximately $15.523 billion for
fiscal 1994, $16.25 0 billion for fiscal 1995 and $16.881
billion for fiscal 1996 and $17.949 billion for fiscal 1997.

Based upon the preliminary financial report of the Commonwealth,
budgeted revenues and other sources collected in fiscal 199 8
were approximately $1 9.696 billion, and budgeted expenditures
and other uses of funds in fiscal 199 8 were approximately
$1 8.887 billion.

The Commonwealth's fiscal 199 9 budget is based on numerous
spending and revenue estimates, the achievement of which cannot be
assured . The Executive Office of Administration and Finance
estimates fiscal 1999 budgeted expenditures and other uses will total
approximately $19.5 billion, while budgeted revenues and other sources
will total approximately $19.29 billion.

LIMITATIONS ON TAX REVENUES. In Massachusetts, efforts to limit and
reduce levels of taxation have been underway for several years. Limits
were established on state tax revenues by legislation enacted on
October 25, 1986 and by an initiative petition approved by the voters
on November 4, 1986. The two measures are inconsistent in several
respects.

Chapter 62F, which was added to the General Laws by initiative
petition in November 1986, establishes a state tax revenue growth
limit for each fiscal year equal to the average positive rate of
growth in total wages and salaries in the Commonwealth, as reported by
the federal government, during the three calendar years immediately
preceding the end of such fiscal year. Chapter 62F also requires that
allowable state tax revenues be reduced by the aggregate amount
received by local governmental units from any newly authorized or
increased local option taxes or excises. Any excess in state tax
revenue collections for a given fiscal year over the prescribed limit,
as determined by the State Auditor, is to be applied as a credit
against the then current personal income tax liability of all
taxpayers in the Commonwealth in proportion to the personal income tax
liability of all taxpayers in the Commonwealth for the immediately
preceding tax year. Unlike Chapter 29B, as described below, the
initiative petition did not exclude principal and interest payments on
Commonwealth debt obligations from the scope of its tax limit.
However, the preamble contained in Chapter 62F provides that
" although not specifically required by anything contained in
this chapter, it is assumed that from allowable state tax revenues as
defined herein the Commonwealth will give priority attention to the
funding of state financial assistance to local governmental units,
obligations under the state governmental pension systems, and payment
of principal and interest on debt and other obligations of the
Commonwealth."

The legislation enacted in October 1986, which added Chapter 29B to
the General Laws, also establishes an allowable state revenue growth
factor by reference to total wages and salaries in the Commonwealth.
However, rather than utilizing a three-year average wage and salary
growth rate, as used by Chapter 62F, Chapter 29B utilizes an allowable
state revenue growth factor equal to one-third of the positive
percentage gain in Massachusetts wages and salaries, as reported by
the federal government, during the three calendar years immediately
preceding the end of a given fiscal year. Additionally, unlike Chapter
62F, Chapter 29B allows for an increase in maximum state tax revenues
to fund an increase in local aid and excludes from its definition of
state tax revenues (i) income derived from local option taxes and
excises, and (ii) revenues needed to fund debt service costs.
Accordingly, the amount of revenues permitted by Chapter 62F will
always be less than the amount of revenues permitted by Chapter
29B.

Tax revenues in fiscal 199 3 through fiscal 199 7 were
lower than the limit set by either Chapter 62F or Chapter 29B, and the
Executive Office for Administration and Finance currently estimates
that state tax revenues in fiscal 199 8 will not reach the limit
imposed by either of these statutes.

LOCAL AID. PROPOSITION 21/2. In November 1980, voters in the
Commonwealth approved a statewide tax limitation initiative petition,
commonly known as Proposition 21/2, to constrain levels of property
taxation and to limit the charges and fees imposed on cities and towns
by certain governmental entities, including county governments.
Proposition 21/2 is not a provision of the state constitution and
accordingly is subject to amendment or repeal by the Legislature.
Proposition 21/2, as amended to date, limits the property taxes that
may be levied by any city or town in any fiscal year to the lesser of
(i) 2.5% of the full and fair cash valuation of the real estate and
personal property therein, and (ii) 2.5% over the previous year's levy
limit plus any growth in the tax base from certain new construction
and parcel subdivisions. Proposition 21/2 also limits any increase in
the charges and fees assessed by certain governmental entities,
including county governments, on cities and towns to the sum of (i)
2.5% of the total charges and fees imposed in the preceding fiscal
year, and (ii) any increase in charges for services customarily
provided locally or services obtained by the city or town at its
option. The law contains certain override provisions and, in addition,
permits debt service on specific bonds and notices and expenditures
for identified capital projects to be excluded from the limits by a
majority vote at a general or special election. At the time
Proposition 21/2 was enacted, many cities and towns had property tax
levels in excess of the limit and were therefore required to roll back
property taxes with a concurrent loss of revenues. Between fiscal 1981
and fiscal 199 7 , the aggregate property tax levy grew from
$3.347 billion to $ 6.160 billion, representing an increase of
approximately 84.1 %. By contrast, according to Federal Bureau
of Labor Statistics, the consumer price index for all urban consumers
in Boston grew during the same period by approximately 97.7 %.

Many communities have responded to the limitation imposed by
Proposition 21/2 through statutorily permitted overrides and
exclusions. Override activity steadily increased throughout the 1980's
before peaking in fiscal 1991 and decreasing thereafter. In fiscal
199 7 , 17 communities had successful override referenda
which added $ 5 .4 million to their levy limits. In fiscal
199 7 , the impact of successful override agenda going back as
far as fiscal 1993, was to raise the levy limits of 114 communities by
$48.8 million. Although Proposition 21/2 will continue to
constrain local property tax revenues, significant capacity exists for
overrides in nearly all cities and towns.

In addition to overrides, Proposition 21/2 allows a community, through
voter approval, to assess taxes in excess of its levy limit for the
payment of certain capital projects (capital outlay expenditure
exclusions) and for the payment of specified debt service costs (debt
exclusions). Capital exclusions were passed by 20 communities
in fiscal 199 7 and totaled $ 3.2 million. In fiscal
199 7 , the impact of successful debt exclusion votes going back
as far as fiscal 1983, was to raise the levy limits of 236
communities by $ 612.9 million.

COMMONWEALTH FINANCIAL SUPPORT FOR LOCAL GOVERNMENTS. During
the 1980s, the Commonwealth increased payments to its cities, towns
and regional school districts ("Local Aid " ) to mitigate the
impact of Proposition 21/2 on local programs and services. In fiscal
199 8 , approximately 20.6 % of the Commonwealth's budget
is estimated to be allocated to direct Local Aid. Local Aid payments
to cities, towns and regional school districts take the form of both
direct and indirect assistance. Direct Local Aid consists of general
revenue sharing funds and specific program funds sent directly to
local governments and regional school districts as reported on the
so-called " cherry sheet" prepared by the Department of Revenue,
excluding certain pension funds and nonappropriated funds.

As a result of comprehensive education reform legislation enacted in
June 1993, a large portion of general revenue sharing funds are
earmarked for public education and are distributed through a formula
designed to provide more aid to the Commonwealth's poorer communities.
The legislation established a fiscal 1993 state spending base of
approximately $1.288 billion for local education purposes and required
annual increases in state expenditures for such purposes above that
base, subject to appropriation, estimated to be approximately $175
million in fiscal 1994, approximately $396 million in fiscal 1995,
approximately $629 million in fiscal 1996 and approximately $881
million in fiscal 1997, with additional annual increases anticipated
in later years. The fiscal 1994, 1995, 1996 and 1997 budgets have
fully funded the requirements imposed by this legislation.

Another component of general revenue sharing, the Lottery and
Additional Assistance programs, provides unrestricted funds for
municipal use. There are also several specific programs funded through
direct Local Aid, such as highway construction, school building
construction, and police education incentives.

In addition to direct Local Aid, the Commonwealth has provided
substantial indirect aid to local governments, including, for example,
payments for the Massachusetts Bay Transportation Authority ("MBTA")
assistance and debt service, pensions for teachers, pension
cost-of-living allowances for municipal retirees, housing subsidies
and the cost of courts and district attorneys that formerly had been
paid by the counties.

INITIATIVE LAW. A statute adopted by voter initiative petition to the
November 1990 statewide election regulates the distribution of Local
Aid to cities and towns. This statute requires that, subject to annual
appropriation, no less than 40% of collections from personal income
taxes, sales and use taxes, corporate excise taxes, and lottery fund
proceeds be distributed to cities and towns. Under the law, the Local
Aid distribution to each city or town would equal no less than 100% of
the total Local Aid received for fiscal 1989. Distributions in excess
of fiscal 1989 levels would be based on new formulas that would
replace the current Local Aid distribution formulas. By its terms, the
new formula would have called for a substantial increase in direct
Local Aid in fiscal 1992 and subsequent years. Nonetheless,
Local Aid payments remain subject to annual appropriation by
the legislature, and appropriations for Local Aid since the
enactment of the initiative law have not met the levels set forth
in the initiative law.

COMMONWEALTH EXPENDITURES. Fiscal 199 4 budgeted expenditures
were $1 5.523 billion, an increase of 4.7 % from fiscal
199 3 . Fiscal 199 5 budgeted expenditures were
$1 6.251 billion, an increase of 4.7 % from fiscal
199 4 . Fiscal 199 6 budgeted expenditures were
$16. 881 billion, an increase of 4. 0 % from fiscal 1995.
Fiscal 1997 budgeted expenditures were $1 7.710 billion, an
increase of 4.8 % over fiscal 199 6 levels . It is
estimated that fiscal 199 8 budgeted expenditures w ere
$1 8.930 billion, an increase of 6.9 % over fiscal
199 7 .

Commonwealth expenditures since 199 4 largely reflect
significant growth in several programs and services provided by the
Commonwealth, principally direct Local Aid, Medicaid, debt service,
pensions, higher education , and other program
expenditures.

The Commonwealth is responsible for the payment of pension benefits
for state employees and for school teachers throughout the state and
for the cost-of-living increases payable to local government retirees.
T he Commonwealth has adopted a funding schedule under
which it is required to fund future pension liabilities currently and
to amortize the accumulated unfunded liabilities by June 30,
2018. Since the adoption of this schedule, the amount of unfunded
liability has been reduced significantly. I n fiscal
199 9 , the estimated pension expenditure is $1.0 59
billion . In fiscal 1996, a number of reform measures
affecting pensions were enacted into law. Among the most notable were
a measure consolidating the assets of the state employees' and
teachers' retirement systems into a single investment fund and another
that will reform the disability pension system.

COMMONWEALTH BOND AND NOTE LIABILITIES. The Commonwealth is
authorized to issue general obligation debt and special obligation
debt. In addition, certain independent authorities and agencies within
the Commonwealth are statutorily authorized to issue bonds and notes
for which the Commonwealth is either directly, in whole or in part, or
indirectly liable. As of April 1, 1998 the Commonwealth's total bond
and note liabilities was $14.075 billion, consisting of $9.721 billion
of general obligation debt, $629 million of special obligation debt,
$3.884 billion of Commonwealth supported debt and $293 million of
commonwealth guaranteed debt. Based on the United States census
resident population estimate for Massachusetts for 1997, the per
capita debt as of June 30, 1997 was $2,166.

COMMONWEALTH CAPITAL SPENDING. Since fiscal 1992, the Executive
Office for Administration and Finance has maintained a five-year
capital spending plan, including an annual administrative limit on the
amount of bond-financed state capital spending. Actual bond-financed
capital expenditures during fiscal years 1994, 1995, 1996 and 1997
were approximately $760.6 million, $902.0 million, $908.5 million and
$956.3 million, respectively. Total capital spending for the current
five year plan is estimated to be $2,706 billion for fiscal 1998,
$2.697 billion for fiscal 1999, $2.418 billion for fiscal 2000, $1.994
billion for fiscal 2001 and $1.462 billion for fiscal 2002. Due to the
size and complexity of the Commonwealth's capital program, and other
factors, including without limitation the continued receipt by the
Commonwealth of assumed annual federal highway apportionments, the
timing and the amount of actual expenditures and debt issuances over
the period will likely vary somewhat from the annual spending amounts
contained in the five-year capital plan.

OTHER FACTORS. Many factors affect the financial condition of the
Commonwealth, including many social, environmental, and economic
conditions, which are beyond the control of the Commonwealth. As with
most urban states, the continuation of many of the Commonwealth's
programs, particularly its human service programs, is in significant
part dependent upon continuing federal reimbursements which have been
declining.

SPECIAL CONSIDERATIONS REGARDING PUERTO RICO

The fiscal year of the Government of Puerto Rico begins each July
1. The Governor is constitutionally required to submit to the
Legislature an annual balanced budget of capital improvements and
operating expenses of the central government for the ensuing fiscal
year. The annual budget is prepared by the Office of Management and
Budget ("OMB"), working with the Planning Board, the Department of the
Treasury, and other government offices and agencies. Section 7 of
Article VI of the Constitution provides that "The appropriations made
for any fiscal year shall not exceed the total revenues, including
available surplus, estimated for said fiscal year unless the
imposition of taxes sufficient to cover said appropriations is
provided by law."

The annual budget, which is developed utilizing elements of program
budgeting and zero-base budgeting, includes an estimate of revenues
and other resources for the ensuing fiscal year under: (i) laws
existing at the time the budget is submitted; and (ii) legislative
measures proposed by the Governor and submitted with the proposed
budget, as well as the Governor's recommendations as to appropriations
that in his judgment are necessary, convenient, and in conformity with
the four-year investment plan prepared by the Planning Board.

A Budgetary Fund was created by Act No. 147 of June 18, 1980, as
amended (the "Budgetary Fund Act"), to cover the appropriations
approved in any fiscal year in which the revenues available for such
fiscal year are insufficient, honor the public debt, and provide for
unforeseen circumstances in the provision of public services. The
Budgetary Fund Act was amended in 1994 to require that an annual
legislative appropriation equal to one third of one percent (.33%) of
the total budgeted appropriations for each fiscal year be deposited in
the Budgetary Fund. In 1997, the Budgetary Fund Act was further
amended to increase the annual legislative appropriation required to
be deposited in the Budgetary Fund to one percent (1%) of the total
revenues of the preceding fiscal year, beginning in fiscal year 2000.
In addition, other income (not classified as revenues) that is not
assigned by law to a specific purpose is also required to be deposited
in the Budgetary Fund. The maximum balance of the Budgetary Fund may
not exceed six percent (6%) of the total appropriations included in
the budget for the preceding fiscal year.

In Puerto Rico, the central government has many functions which in
the fifty states are the responsibility of local government, such as
providing public education and police and fire protection. The
central government also makes large annual grants to the University of
Puerto Rico and to the municipalities. Debt service on Sugar
Corporation notes paid by the Government of Puerto Rico is included in
current expenses for economic development, and debt service on Urban
Renewal and Housing Corporation bonds and notes and on Housing Bank
and Finance Agency mortgage subsidy bonds paid by the Government of
Puerto Rico is included in current expenses for housing.

Approximately 25.2% of the General Fund is committed, including
debt service on direct debt of the Commonwealth and on the debt of the
Sugar Corporation, municipal subsidies, grants to the University of
Puerto Rico, contributions to Aqueduct and Sewer Authority, and rental
payments to Public Building Authority, among other.

In the fiscal 1999 budget revenues and other resources of all
budgetary funds total $10,308,078,000 excluding balances from the
previous fiscal year and general obligation bonds authorized. The
estimated net increase in General Fund revenues in fiscal 1999 are
accounted for by increases in personal income taxes (up $258,354,000),
retained non-resident income tax (up $176,921,000), general excise tax
of 5% (up $60,259,000), motor vehicles and accessories (up
$61,569,000), federal excise taxes on off-shore shipments (up
$33,033,000), special excise tax on certain petroleum products (up
$20,282,000), corporation income taxes (up $17,347,000), registration
and document certification fees (up $13,433,000), alcoholic beverages
(up $5,347,000), licenses (up $4,681,000), electronic lottery (up
$4,965,000) and decreases in property taxes (down $3,460,000), customs
(down $11,864,000) and tollgate taxes (down $56,420,000).

Current expenses and capital improvements of all budgetary funds
total $10,687,869,000, an increase of $951,255,000 from fiscal 1998.
The major changes in General Fund expenditures by program in fiscal
1999 are: public safety and protection (up $187,444,000), education
(up $165,661,000), health (up $160,256,000), general government (up
$77,714,000), other debts (up $69,721,000), welfare (up $24, 182,000),
economic development (up $15,865,000), special pension contributions
(up $6,115,000), and decreases in transportation and communications
(down $83,000), housing (down $620,000), debt service (down
$13,849,000), and contributions to municipalities (down
$37,969,000).

The general obligation bond authorization for the fiscal 1999
budget was $475,000,000.

In the fiscal 2000 budget proposal revenues and other resources of
all budgetary funds total $10,426,475,000 excluding balances from the
previous fiscal year and general obligation bonds authorized. The
estimated net increase in General Fund revenues in fiscal 2000 are
accounted for by increases in personal income taxes (up $199,000,000),
corporation income taxes (up $102,000,000), general excise tax of 5%
(up $65,000,000), income tax withheld from non-residents (up
$44,000,000), motor vehicles and accessories (up $22,000,000),
alcoholic beverages (up $13,000,000), registration and document
certification fees (up $10,000,000), and decreases in property taxes
(down $2,000,000), special excise tax on certain petroleum products
(down $3,000,000), cigarettes (down $6,000,000), federal excise taxes
on off-shore shipments (down $24,000,000), and tollgate taxes (down
$14,000,000).

Current expenses and capital improvements of all budgetary funds
total $11,012,166,000, an increase of $324,297,000 from fiscal 1999.
The major changes in General Fund expenditures by program in fiscal
2000 are: general government (up $157,265,000), health (up
$83,310,000), debt service (up $94,550,000), contributions to
municipalities (up $66,296,000), education (up $75,035,000),
transportation and communications (up $13,636,000), special pension
contributions (up $3,792,000), housing (down $4,645,000), economic
development (down $30,201,000), public safety and protection (down
$26,999,000), and other debts service (down $106,488,000).

The general obligation bond authorization for the fiscal 2000
budget was $475,000,000.

The Government of Puerto Rico is required to contribute directly to
three retirement systems for public employees. The Government of
Puerto Rico is responsible for approximately 66% of total employer
contributions to Employees Retirement System and 100% and 99% of total
employer contributions to the Judiciary and Teachers Retirement
Systems, respectively. As of July 1, 1998 the total pension benefit
obligation for the Employees Retirement System and the Judiciary
Retirement System was $7,638,000,000 and $95,5000,000, respectively,
and the unfunded pension benefit obligation for the same period was
$5,963,000,000 and $28,400,000, respectively. As of June 30, 1998, the
accrued pension liability of the Teachers Retirement System was
$3,154,678,299, the value of assets amounted to $2,135,436,000, and
the resulting unfunded accrued liability was $1,019,242,299, an
increase of $48,437,260 from the prior valuation made as of June 30,
1997.

On February 1, 1990, the Legislature of Puerto Rico enacted Act No.
1 amending the organic act of the Employees Retirement System to
reduce the future pension liabilities of the Employees Retirement
System. Also, Act No. 305 of September 24, 1999, further amends the
organic act of the Employees Retirement System to change it,
prospectively, from a defined benefit system to a defined contribution
system. Based on actuarial studies conducted by the actuary of the
Employees Retirement System, it is expected that the implementation of
the defined contribution system will allow the Government of Puerto
Rico to reduce the current actuarial deficit of the Employees
Retirement System. Also, the law approving the sale of a controlling
interest in PRTC to a consortium led by GTE International
Telecommunications Incorporated provides that any future proceeds
received by the Government from the sale of its remaining stock
ownership in PRTC will be transferred to the Employees Retirement
System to reduce its accumulated unfunded pension benefit obligation.
It is recognized that it will be necessary to further strengthen the
finances of the Teachers Retirement System in order to assure that
combined contributions and investment income continue to exceed
benefit payments, avoiding the possible future drawdown of assets.

The economy of Puerto Rico is fully integrated with that of the
United States. In fiscal 1998, trade with the United States accounted
for approximately 90% of Puerto Rico's exports and approximately 61%
of its imports. In this regard, in fiscal 1998 Puerto Rico
experienced a $8.5 billion positive adjusted merchandise trade
balance.

Since fiscal 1985, personal income, both aggregate and per capita,
has increased consistently each fiscal year. In fiscal 1998,
aggregate personal income was $33.7 billion ($30.8 billion in 1992
prices) and personal per capita income was $8,817 ($8,063 in 1992
prices). Gross product in fiscal 1995 was $28.4 billion ($25.9
billion in 1992 prices) and gross product in fiscal 1999 was $38.1
billion ($29.7 billion in 1992 prices). This represents an increase
in gross product of 34% from fiscal 1995 to 1999 (14.5% in 1992
prices).

Puerto Rico's economic expansion, which has lasted over ten years,
continued throughout the five year period from fiscal 1995 through
fiscal 1999. Almost every sector of the economy participated, and
record levels of employment were achieved. Factors behind the
continued expansion included Government-sponsored economic development
programs, periodic declines in the exchange value of the U.S. dollar,
increases in the level of federal transfers, low oil prices and the
relatively low cost of borrowing funds during the period.

Average employment increased from 1,051,000 in fiscal 1995, to
1,147,000 in fiscal 1999. Unemployment, although at relatively low
historical levels, remains above the U.S. average. Average
unemployment decreased from 13.8% in fiscal 1995, to 12.5% in fiscal
1999.

Manufacturing is the largest sector in the economy, accounting for
$23.0 billion or 42.8% of gross domestic product in fiscal 1998. The
manufacturing sector employed 141,068 workers as of March 1999.
Manufacturing in Puerto Rico is now more diversified than during
earlier phases of industrial development. In the last two decades,
industrial development has tended to be more capital intensive and
dependent on skilled labor. This gradual shift is best exemplified by
heavy investment in pharmaceuticals, scientific instruments,
computers, microprocessors, and electrical products over the last
decade. While total employment in the manufacturing sector decreased
by 12,205 from March 1997 to March 1999, other indicators suggest that
manufacturing production did not decrease. Average weekly hours
worked increased 5.2%, industrial energy consumption increased 0.7%
and exports increased 45.7% from fiscal 1997 to fiscal 1999. Most of
the decreases in employment have been concentrated in the labor
intensive industries, particularly apparel, textile and tuna
manufacturing. The services sector, which includes wholesale and
retail trade and finance, insurance, real estate, hotels and related
services, and other services, ranks second in its contribution to
gross domestic product and it is the sector that employs the greatest
number of people. In fiscal 1998, the service sector generated $19.6
billion in gross domestic product or 36.5% of the total. Employment
in this sector grew from 478,079 in fiscal 1994 to 572,765 in fiscal
1998, a cumulative increase of 19.8%. This increase was greater than
the 12.5% cumulative growth in employment over the same period. The
Government sector of the Commonwealth plays an important role in the
economy of the island. In fiscal year 1998, the Government accounted
for $5.2 billion of Puerto Rico's gross domestic product, or 9.8% of
the total, and provided 21.5% of the total employment. The
construction industry has experienced real growth since fiscal 1987.
In fiscal 1999, investment in construction rose to an unprecedented
$6.6 billion, an increase of 23.9% as compared to $5.4 billion for
fiscal 1998. Tourism also contributes significantly to the island
economy, accounting for 6.4% of the island's gross domestic product in
fiscal 1998.

The present administration has developed and is implementing a new
economic development program which is based on the premise that the
private sector should provide the primary impetus for economic
development and growth. This new program, which is referred to as the
New Economic Model, promotes changing the role of the Government from
one of being a provider of most basic services to that of a
facilitator for private sector initiatives and encourages private
sector investment by reducing Government-imposed regulatory
restraints.

The New Economic Model contemplates the development of initiatives
that will foster private investment in, and private management of,
sectors that are served more efficiently and effectively by the
private enterprise. One of these initiatives has been the adoption of
a new tax code intended to expand the tax base, reduce top personal
and corporate tax rates, and simplify the tax system. Another
initiative is the improvement and expansion of Puerto Rico's
infrastructure to facilitate private sector development and growth,
such as the construction of the water pipeline and cogeneration
facilities described below and the construction of a light rail system
for the San Juan metropolitan area.

The New Economic Model also seeks to identify and promote areas in
which Puerto Rico can compete more effectively in the global markets.
Tourism has been identified as one such area because of its potential
for job creation and contribution to the gross product. In 1993, a
new Tourism Incentives Act and a Tourism Development Fund were
implemented in order to provide special tax incentives and financing
for the development of new hotel projects and the tourism industry.
As a result of these initiatives, new hotels have been constructed or
are under construction which have increased the number of hotel rooms
on the island from 8,415 in fiscal 1992 to 11,095 at the end of fiscal
1999 and to a projected 12,650 by the end of fiscal 2000.

The New Economic Model also seeks to reduce the size of the
Government's direct contribution to gross domestic product. As part
of this goal, the Government has transferred certain governmental
operations and sold a number of its assets to private parties. Among
these are: (i) the Government sold the assets of the Puerto Rico
Maritime Authority; (ii) the Aqueducts and Sewer Authority executed a
construction and operating agreement with a private consortium for the
design, construction, and operation of an approximately 75 million
gallon per day water pipeline to the San Juan metropolitan area from
the Dos Bocas reservoir in Utuado; (iii) the Electric Power Authority
executed power purchase contracts with private power producers under
which two cogeneration plants (with a total capacity of approximately
874 megawatts), using fuels other than oil, will be constructed; (iv)
the Corrections Administration entered into operating agreements with
two private companies for the operation of three new correctional
facilities; (v) the Government entered into a definitive agreement to
sell certain assets of a pineapple juice processing business and sold
certain mango growing operations; (vi) the Government is in the
process of transferring to local sugar cane growers certain sugar
processing facilities; (vii) the Government sold three hotel
properties and is currently negotiating the sale of a complex
consisting of two hotels and a convention center; and (viii) the
Government sold a controlling interest in the Puerto Rico Telephone
Company, a subsidiary of the Telephone Authority, to a consortium led
by GTE International Telecommunications Incorporated.

One of the goals of the Rossello administration is to change Puerto
Rico's public health care system from one in which the Government
provides free health services to low income individuals through public
health facilities owned and administered by the Government to one in
which all medical services are provided by the private sector and the
Government provides comprehensive health insurance coverage for
qualifying (generally low income) Puerto Rico residents. Under this
new system, the Government selects, through a bidding system, one
private health insurance company in each of several designated regions
of the island and pays such insurance company the insurance premium
for each eligible beneficiary within such region. This new health
insurance system is now covering 77 municipalities out of a total of
78 on the island. It is expected that the last municipality will be
added in July 2000. The total cost of this program will depend on the
number of municipalities included in the program, the number of
participants receiving coverage, and the date coverage commences. As
of August 1, 1999, over 1.7 million persons were participating in the
program at an estimated annual cost to Puerto Rico for fiscal 2000 of
approximately $994 million. In conjunction with this program, the
operation of certain public health facilities has been transferred to
private entities. The Government's current privatization plan for
health facilities provides for the transfer of ownership of all health
facilities to private entities. The Government has sold forty-four
health facilities to private companies and is currently in the process
of closing the sale of fourteen additional health facilities to such
companies.

One of the factors assisting the development of the manufacturing
sector in Puerto Rico has been the federal and Commonwealth tax
incentives available, particularly those under the Puerto Rico
Industrial Incentives Program and Sections 30A and 936 of the Internal
Revenue Code 1986, as amended (the "Code").

Since 1948, Puerto Rico has promulgated various industrial
incentive laws designed to stimulate industrial investment. Under
these laws, companies engaged in manufacturing and certain other
designated activities were eligible to receive full or partial
exemption from income, property, and other taxes. The most recent of
these laws is Act No. 135 of December 2, 1997 (the "1998 Tax
Incentives Law").

The benefits provided by the 1998 Tax Incentives Law are available
to new companies as well as companies currently conducting tax-exempt
operations in Puerto Rico that choose to renegotiate their existing
tax exemption grant. Activities eligible for tax exemption include
manufacturing, certain services performed for markets outside Puerto
Rico, the production of energy from local renewable sources for
consumption in Puerto Rico, and laboratories for scientific and
industrial research. For companies qualifying thereunder, the 1998
Tax Incentives Law imposes income tax rates ranging from 2% to 7%. In
addition, it grants 90% exemption from property taxes, 100% exemption
from municipal license taxes during the first eighteen months of
operation and between 80% and 60% thereafter, and 100% exemption from
municipal excise taxes. The 1998 Tax Incentives Law also provides
various special deductions designated to stimulate employment and
productivity, research and development, and capital investment in
Puerto Rico.

Under the 1998 Tax Incentives Law, companies are able to repatriate
or distribute their profits free of dividend taxes. In addition,
passive income derived from designated investments will continue to be
fully exempt from income and municipal license taxes. Individual
shareholders of an exempted business are allowed a credit against
their Puerto Rico income taxes equal to 30% of their proportionate
share in the exempted business' income tax liability. Gain from the
sale or exchange of shares of an exempted business by its shareholders
during the exemption period will be subject to a 4% income tax
rate.

For many years, U.S. companies operating in Puerto Rico enjoyed a
special tax credit that was available under Section 936 of the Code.
Originally, the credit provided an effective 100% federal tax
exemption for operating and qualifying investment income from Puerto
Rico sources. Amendments to Section 936 made in 1993 (the "1993
Amendments") instituted two alternative methods for calculating the
tax credit and limited the amount of the credit that a qualifying
company could claim. These limitations are based on a percentage of
qualifying income (the "percentage of income limitation") and on
qualifying expenditures on wages and other wage related benefits (the
"economic activity limitation", also known as the "wage credit
limitation"). As a result of amendments incorporated in the Small
Business Job Protection Act of 1996 enacted by the U.S. Congress and
signed into law by President Bill Clinton on August 20, 1996 (the
"1996 Amendments"), the tax credit, as described below, is now being
phased out over a ten-year period for existing claimants and is no
longer available for corporations that establish operations in Puerto
Rico after October 13, 1995 (including existing Section 936
Corporations (as defined below) to the extent substantially new
operations are established in Puerto Rico). The 1996 Amendments also
moved the credit based on the economic activity limitation to Section
30A of the Code and phased it out over 10 years. In addition, the
1996 Amendments eliminated the credit previously available for income
derived from certain qualified investments in Puerto Rico. The
Section 30A Credit and the remaining Section 936 credit are discussed
below.

SECTION 30A. The 1996 Amendments added a new Section 30A to the
Code. Section 30A permits a "qualifying domestic corporation" ("QDC")
that meets certain gross income tests (which are similar to the 80%
and 75% gross income tests of Section 936 of the Code discussed below)
to claim a credit (the "Section 30A Credit") against the federal
income tax imposed on taxable income derived from sources outside the
United States from the active conduct of a trade or business in Puerto
Rico or from the sale of substantially all the assets used in such
business ("possession income").

A QDC is a U.S. corporation which (i) was actively conducting a
trade or business in Puerto Rico on October 13, 1995, (ii) had a
Section 936 election in effect for its taxable year that included
October 13, 1995, (iii) does not have in effect an election to use the
percentage limitation of Section 936(a)(4)(B) of the Code, and (iv)
does not add a "substantial new line of business."

The Section 30A Credit is limited to the sum of (i) 60% of
qualified possession wages as defined in the Code, which includes
wages up to 85% of the maximum earnings subject to the OASDI portion
of Social Security taxes plus an allowance for fringe benefits of 15%
of qualified possession wages, (ii) a specified percentage of
depreciation deductions ranging between 15% and 65%, based on the
class life of tangible property, and (iii) a portion of Puerto Rico
income taxes paid by the QDC, up to a 9% effective tax rate (but only
if the QDC does not elect the profit-split method for allocating
income from intangible property).

A QDC electing Section 30A of the Code may compute the amount of
its active business income, eligible for the Section 30A Credit, by
using either the cost sharing formula, the profit-split formula, or
the cost-plus formula, under the same rules and guidelines prescribed
for such formulas as provided under Section 936 (see discussion
below). To be eligible for the first two formulas, the QDC must have
a significant presence in Puerto Rico.

In the case of taxable years beginning after December 31, 2001, the
amount of possession income that would qualify for the Section 30A
Credit would be subject to a cap based on the QDC's possession income
for an average adjusted base period ending before October 14,
1995.

Section 30A applies only to taxable years beginning after December
31, 1995 and before January 1, 2006.

SECTION 936. Under Section 936 of the Code, as amended by the 1996
Amendments, and as an alternative to the Section 30A Credit, U.S.
corporations that meet certain requirements and elect its application
("Section 936 Corporations") are entitled to credit against their U.S.
corporate income tax, the portion of such tax attributable to income
derived from the active conduct of a trade or business within Puerto
Rico ("active business income") and from the sale or exchange of
substantially all assets used in the active conduct of such trade or
business. To qualify under Section 936 in any given taxable year, a
corporation must derive for the three-year period immediately
preceding the end of such taxable year (i) 80% or more of its gross
income from sources within Puerto Rico and (ii) 75% or more of its
gross income from the active conduct of a trade or business in Puerto
Rico.

Under Section 936, a Section 936 Corporation may elect to compute
its active business income, eligible for the Section 936 credit, under
one of three formulas: (A) a cost-sharing formula, whereby it is
allowed to claim all profits attributable to manufacturing
intangibles, and other functions carried out in Puerto Rico, provided
it contributes to the research and development expenses of its
affiliated group or pays certain royalties; (B) a profit-split
formula, whereby it is allowed to claim 50% of the net income of its
affiliated group from the sale of products manufactured in Puerto
Rico; or (C) a cost-plus formula, whereby it is allowed to claim a
reasonable profit on the manufacturing costs incurred in Puerto Rico.
To be eligible for the first two formulas, the Section 936 Corporation
must have a significant business presence in Puerto Rico for purposes
of the Section 936 rules.

As a result of the 1993 Amendments and the 1996 Amendments, the
Section 936 credit is only available to companies that were operating
in Puerto Rico on October 13, 1995, and had elected the percentage of
income limitation and is limited in amount to 40% of the credit
allowable prior to the 1993 Amendments, subject to a five-year
phase-in period from 1994 to 1998 during which period the percentage
of the allowable credit is reduced from 60% to 40%.

In the case of taxable years beginning on or after 1998, the
possession income subject to the Section 936 credit will be subject to
a cap based on the Section 936 Corporation's possession income for an
average adjusted base period ending on October 14, 1995. The Section
936 credit is eliminated for taxable years beginning in 2006.

PROPOSAL TO EXTEND THE PHASEOUT OF SECTION 30A. During 1997, the
Government of Puerto Rico proposed to Congress the enactment of a new
permanent federal incentive program similar to that provided under
Section 30A. Such a program would provide U.S. companies a tax credit
based on qualifying wages paid and other wage-related expenses, such
as fringe benefits, as well as depreciation expenses for certain
tangible assets and research and development expenses. Under the
Governor's proposal, the credit granted to qualifying companies would
continue in effect until Puerto Rico shows, among other things,
substantial economic improvements in terms of certain economic
parameters. The fiscal 1998, fiscal 1999 and fiscal 2000 budgets
submitted by President Clinton to Congress included a proposal to
modify Section 30A to (i) extend the availability of the Section 30A
Credit indefinitely; (ii) make it available to companies establishing
operations in Puerto Rico after October 13, 1995; and (iii) eliminate
the income cap. This proposal was not included in the 1998 or 1999
budgets approved by Congress. While the Government of Puerto Rico
plans to continue lobbying for this proposal, it is not possible at
this time to predict whether the Section 30A Credit will be so
modified.

OUTLOOK. It is not possible at this time to determine the
long-term effect on the Puerto Rico economy of the enactment of the
1996 Amendments. The Government of Puerto Rico does not believe there
will be short-term or medium-term material adverse effects on Puerto
Rico's economy as a result of the enactment of the 1996 Amendments.
The Government of Puerto Rico further believes that during the
phase-out period sufficient time exists to implement additional
incentive programs to safeguard Puerto Rico's competitive
position.

PORTFOLIO TRANSACTIONS

All orders for the purchase or sale of portfolio securities are placed
on behalf of each fund by FMR pursuant to authority contained in the
management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and investment
accounts for which it or its affiliates act as investment adviser. In
selecting broker-dealers, subject to applicable limitations of the
federal securities laws, FMR considers various relevant factors,
including, but not limited to: the size and type of the transaction;
the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability,
and financial condition of the broker-dealer firm; the broker-dealer's
execution services rendered on a continuing basis; the reasonableness
of any commissions; and, if applicable, arrangements for payment of
fund expenses.

If FMR grants investment management authority to a sub-adviser (see
the section entitled "Management Contracts"), that sub-adviser is
authorized to place orders for the purchase and sale of portfolio
securities, and will do so in accordance with the policies described
above.

Each fund may execute portfolio transactions with broker-dealers who
provide research and execution services to the fund or other
investment accounts over which FMR or its affiliates exercise
investment discretion. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing, or
selling securities; and the availability of securities or the
purchasers or sellers of securities. In addition, such broker-dealers
may furnish analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and
performance of investment accounts; and effect securities transactions
and perform functions incidental thereto (such as clearance and
settlement).

For transactions in fixed-income securities, FMR's selection of
broker-dealers is generally based on the availability of a security
and its price and, to a lesser extent, on the overall quality of
execution and other services, including research, provided by the
broker-dealer.

The receipt of research from broker-dealers that execute transactions
on behalf of a fund may be useful to FMR in rendering investment
management services to that fund or its other clients, and conversely,
such research provided by broker-dealers who have executed transaction
orders on behalf of other FMR clients may be useful to FMR in carrying
out its obligations to a fund. The receipt of such research has not
reduced FMR's normal independent research activities; however, it
enables FMR to avoid the additional expenses that could be incurred if
FMR tried to develop comparable information through its own efforts.

Fixed-income securities are generally purchased from an issuer or
underwriter acting as principal for the securities, on a net basis
with no brokerage commission paid. However, the dealer is compensated
by a difference between the security's original purchase price and the
selling price, the so-called "bid-asked spread." Securities may also
be purchased from underwriters at prices that include underwriting
fees.

Subject to applicable limitations of the federal securities laws, a
fund may pay a broker-dealer commissions for agency transactions that
are in excess of the amount of commissions charged by other
broker-dealers in recognition of their research and execution
services. In order to cause a fund to pay such higher commissions, FMR
must determine in good faith that such commissions are reasonable in
relation to the value of the brokerage and research services provided
by such executing broker-dealers, viewed in terms of a particular
transaction or FMR's overall responsibilities to that fund or its
other clients. In reaching this determination, FMR will not attempt to
place a specific dollar value on the brokerage and research services
provided, or to determine what portion of the compensation should be
related to those services.

To the extent permitted by applicable law, FMR is authorized to
allocate portfolio transactions in a manner that takes into account
assistance received in the distribution of shares of the funds or
other Fidelity funds and to use the research services of brokerage and
other firms that have provided such assistance. FMR may use research
services provided by and place agency transactions with National
Financial Services Corporation (NFSC), an indirect subsidiary of FMR
Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services.

FMR may allocate brokerage transactions to broker-dealers (including
affiliates of FMR) who have entered into arrangements with FMR under
which the broker-dealer allocates a portion of the commissions paid by
a fund toward the reduction of that fund's expenses. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.

Section 11(a) of the Securities Exchange Act of 1934 prohibits members
of national securities exchanges from executing exchange transactions
for investment accounts which they or their affiliates manage, unless
certain requirements are satisfied. Pursuant to such requirements, the
Board of Trustees has authorized NFSC to execute portfolio
transactions on national securities exchanges in accordance with
approved procedures and applicable SEC rules.

The Trustees of each fund periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of the fund and review the commissions paid by
the fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the fund.

For the fiscal periods ended January 31, 2000 and 1999, the
portfolio turnover rates were ___% and ___ % , respectively, for
Spartan Massachusetts Municipal Income.

[For the fiscal years ended January 2000, January 1999, and January
1998, the funds paid no brokerage commissions.]

[For the fiscal year ended January 3 1, 2000 the funds paid no
brokerage commissions to firms that provided research services.]

[ The following tables show the brokerage commissions paid by the
funds. Significant changes in brokerage commissions paid by a fund
from year to year may result from changing asset levels throughout the
year.] A fund may pay both commissions and spreads in connection with
the placement of portfolio transactions.

[The following table shows the total amount of brokerage commissions
paid by each fund.]

Fiscal Year Ended Total Amount Paid

[MASSACHUSETTS MUNICIPAL January 31
MONEY MARKET]

2000 $

1999

1998

[SPARTAN MASSACHUSETTS
MUNICIPAL MONEY MARKET]

2000

1999

1998

[SPARTAN MASSACHUSETTS
MUNICIPAL INCOME]

2000

1999

1998

[Of the following tables, the first shows the total amount of
brokerage commissions paid by each fund to NFSC for the past three
fiscal years. [The second table shows the approximate percentage of
aggregate brokerage commissions paid by a fund to NFSC for
transactions involving the approximate percentage of the aggregate
dollar amount of transactions for which the fund paid brokerage
commissions for the fiscal year ended 2000.] NFSC is paid on a
commission basis].]

Fiscal Year Ended Total Amount Paid to NFSC

[MASSACHUSETTS MUNICIPAL January 31
MONEY MARKET]

2000 $

1999

1998

[SPARTAN MASSACHUSETTS
MUNICIPAL MONEY MARKET]

2000

1999

1998

[SPARTAN MASSACHUSETTS
MUNICIPAL INCOME]

2000

1999

1998

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year Ended 2000 % of Aggregate Commissions % of Aggregate Dollar Amount
Paid to NFSC of Transactions Effected
through NFSC

[MASSACHUSETTS MUNICIPAL January 31 % %
MONEY MARKET]

[SPARTAN MASSACHUSETTS January 31 % %
MUNICIPAL MONEY MARKET]

[SPARTAN MASSACHUSETTS January 31 % %
MUNICIPAL INCOME]

</TABLE>

[: (dagger) The difference between the percentage of aggregate
brokerage commissions paid to, and the percentage of the aggregate
dollar amount of transactions effected through, NFSC is a result of
the low commission rates charged by NFSC.]

[NFSC has used a portion of the commissions paid by [a] fund to reduce
that fund's [custodian or transfer agent fees/ expenses].]

[The following table shows the dollar amount of brokerage commissions
paid to firms that provided research services and the approximate
dollar amount of the transactions involved for the fiscal year ended
2000].

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year Ended 2000 $ Amount of Commissions Paid $ Amount of Brokerage
to Firms that Provided Transactions Involved*
Research Services*

[MASSACHUSETTS MUNICIPAL January 31 $ $
MONEY MARKET]

[SPARTAN MASSACHUSETTS January 31
MUNICIPAL MONEY MARKET]

[SPARTAN MASSACHUSETTS January 31
MUNICIPAL INCOME]

</TABLE>

[*The provision of research services was not necessarily a factor in
the placement of all this business with such firms.]

[For the fiscal year ended January 31, 2000, [the funds] paid no
brokerage commissions to firms that provided research services.]

The Trustees of each fund have approved procedures in conformity with
Rule 10f-3 under the 1940 Act whereby a fund may purchase securities
that are offered in underwritings in which an affiliate of FMR
participates. These procedures prohibit the funds from directly or
indirectly benefiting an FMR affiliate in connection with such
underwritings. In addition, for underwritings where an FMR affiliate
participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities
that the funds could purchase in the underwriting.

From time to time the Trustees will review whether the recapture for
the benefit of the funds of some portion of the brokerage commissions
or similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at
present no other recapture arrangements are in effect. The Trustees
intend to continue to review whether recapture opportunities are
available and are legally permissible and, if so, to determine in the
exercise of their business judgment whether it would be advisable for
each fund to seek such recapture.

Although the Trustees and officers of each fund are substantially the
same as those of other funds managed by FMR or its affiliates,
investment decisions for each fund are made independently from those
of other funds managed by FMR or investment accounts managed by FMR
affiliates. It sometimes happens that the same security is held in the
portfolio of more than one of these funds or investment accounts.
Simultaneous transactions are inevitable when several funds and
investment accounts are managed by the same investment adviser,
particularly when the same security is suitable for the investment
objective of more than one fund or investment account.

When two or more funds are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in
accordance with procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as each fund is
concerned. In other cases, however, the ability of the funds to
participate in volume transactions will produce better executions and
prices for the funds. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to each fund
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.

VALUATION

Each fund's NAV is the value of a single share. The NAV of each fund
is computed by adding the value of the fund's investments, cash, and
other assets, subtracting its liabilities, and dividing the result by
the number of shares outstanding.

TAX-FREE BOND FUND. Portfolio securities are valued by various
methods. If quotations are not available, fixed-income securities are
usually valued on the basis of information furnished by a pricing
service that uses a valuation matrix which incorporates both
dealer-supplied valuations and electronic data processing techniques.
Use of pricing services has been approved by the Board of Trustees. A
number of pricing services are available, and the fund may use various
pricing services or discontinue the use of any pricing service.

Futures contracts and options are valued on the basis of market
quotations, if available. Securities of other open-end investment
companies are valued at their respective NAVs.

The procedures set forth above need not be used to determine the value
of the securities owned by a fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method would more
accurately reflect the fair value of such securities. For example,
securities and other assets for which there is no readily available
market value may be valued in good faith by a committee appointed by
the Board of Trustees. In making a good faith determination of the
value of a security, the committee may review price movements in
futures contracts and American Depositary Receipts (ADRs), market and
trading trends, the bid/ask quotes of brokers and off-exchange
institutional trading.

MONEY MARKET FUNDS. Portfolio securities and other assets are valued
on the basis of amortized cost. This technique involves initially
valuing an instrument at its cost as adjusted for amortization of
premium or accretion of discount rather than its current market value.
The amortized cost value of an instrument may be higher or lower than
the price a fund would receive if it sold the instrument.

Securities of other open-end investment companies are valued at their
respective NAVs.

At such intervals as they deem appropriate, the Trustees consider the
extent to which NAV calculated by using market valuations would
deviate from the $1.00 per share calculated using amortized cost
valuation. If the Trustees believe that a deviation from a fund's
amortized cost per share may result in material dilution or other
unfair results to shareholders, the Trustees have agreed to take such
corrective action, if any, as they deem appropriate to eliminate or
reduce, to the extent reasonably practicable, the dilution or unfair
results. Such corrective action could include selling portfolio
instruments prior to maturity to realize capital gains or losses or to
shorten average portfolio maturity; withholding dividends; redeeming
shares in kind; establishing NAV by using available market quotations;
and such other measures as the Trustees may deem appropriate.

PERFORMANCE

A fund may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is
not intended to indicate future returns. The share price of a bond
fund, the yield of a fund, and return fluctuate in response to market
conditions and other factors, and the value of a bond fund's shares
when redeemed may be more or less than their original cost.

YIELD CALCULATIONS (MONEY MARKET FUNDS).To compute the yield for a
money market fund for a period, the net change in value of a
hypothetical account containing one share reflects the value of
additional shares purchased with dividends from the one original share
and dividends declared on both the original share and any additional
shares. The net change is then divided by the value of the account at
the beginning of the period to obtain a base period return. This base
period return is annualized to obtain a current annualized yield. A
money market fund also may calculate an effective yield by compounding
the base period return over a one-year period. In addition to the
current yield, a money market fund may quote yields in advertising
based on any historical seven-day period. Yields for a money market
fund are calculated on the same basis as other money market funds, as
required by applicable regulation.

Yield information may be useful in reviewing a fund's performance and
in providing a basis for comparison with other investment
alternatives. However, a fund's yield fluctuates, unlike investments
that pay a fixed interest rate over a stated period of time. When
comparing investment alternatives, investors should also note the
quality and maturity of the portfolio securities of respective
investment companies they have chosen to consider.

Investors should recognize that in periods of declining interest rates
a fund's yield will tend to be somewhat higher than prevailing market
rates, and in periods of rising interest rates a fund's yield will
tend to be somewhat lower. Also, when interest rates are falling, the
inflow of net new money to a fund from the continuous sale of its
shares will likely be invested in instruments producing lower yields
than the balance of the fund's holdings, thereby reducing a fund's
current yield. In periods of rising interest rates, the opposite can
be expected to occur.

YIELD CALCULATIONS (BOND FUND). Yields for a fund are computed by
dividing a fund's interest and income for a given 30-day or one-month
period, net of expenses, by the average number of shares entitled to
receive distributions during the period, dividing this figure by the
fund's NAV at the end of the period, and annualizing the result
(assuming compounding of income) in order to arrive at an annual
percentage rate. Income is calculated for purposes of yield quotations
in accordance with standardized methods applicable to all stock and
bond funds. In general, interest income is reduced with respect to
bonds trading at a premium over their par value by subtracting a
portion of the premium from income on a daily basis, and is increased
with respect to bonds trading at a discount by adding a portion of the
discount to daily income. Capital gains and losses generally are
excluded from the calculation.

Income calculated for the purposes of calculating the fund's yield
differs from income as determined for other accounting purposes.
Because of the different accounting methods used, and because of the
compounding of income assumed in yield calculations, the fund's yield
may not equal its distribution rate, the income paid to your account,
or the income reported in the fund's financial statements.

Yield information may be useful in reviewing the fund's performance
and in providing a basis for comparison with other investment
alternatives. However, the fund's yield fluctuates, unlike investments
that pay a fixed interest rate over a stated period of time. When
comparing investment alternatives, investors should also note the
quality and maturity of the portfolio securities of respective
investment companies they have chosen to consider.

Investors should recognize that in periods of declining interest rates
the fund's yield will tend to be somewhat higher than prevailing
market rates, and in periods of rising interest rates the fund's yield
will tend to be somewhat lower. Also, when interest rates are falling,
the inflow of net new money to the fund from the continuous sale of
its shares will likely be invested in instruments producing lower
yields than the balance of the fund's holdings, thereby reducing the
fund's current yield. In periods of rising interest rates, the
opposite can be expected to occur.

The tax-equivalent yield of a fund is the rate an investor would have
to earn from a fully taxable investment before taxes to equal a fund's
tax-free yield. Tax-equivalent yields are calculated by dividing a
fund's yield by the result of one minus a specified combined federal
and state income tax rate. If only a portion of a fund's yield is
tax-exempt, only that portion is adjusted in the calculation.

The following tables show the effect of a shareholder's tax status on
effective yield under federal and state income tax laws for 2000. The
second table shows the approximate yield a taxable security must
provide at various income brackets to produce after-tax yields
equivalent to those of hypothetical tax-exempt obligations yielding
from _% to _ %. Of course, no assurance can be given that
a fund will achieve any specific tax-exempt yield. While a
state municipal fund invests principally in obligations whose interest
is exempt from federal and state income tax, other income received by
the fund may be taxable. The tables do not take into account local
taxes, if any, payable on fund distributions.

Use the first table to find your approximate effective tax bracket
taking into account federal and state taxes for 2000.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
2000 TAX RATES

Taxable Income* Massachusetts State Marginal Combined Federal and State
Rate Effective Rate**

Single Return Joint Return Federal Marginal Rate Massachusetts State Marginal Combined Federal and State
Rate Effective Rate**

$ $ $ $ % % %

% % %

</TABLE>

* Net amount subject to federal income tax after deductions and
exemptions. Assumes ordinary income only.

** Excludes the impact of the phaseout of personal exemptions,
limitations on itemized deductions, and other credits, exclusions, and
adjustments which may increase a taxpayer's marginal tax rate. An
increase in a shareholder's marginal tax rate would increase that
shareholder's tax-equivalent yield.

Having determined your effective tax bracket, use the following table
to determine the tax-equivalent yield for a given tax-free yield.

If your combined federal and state effective tax rate in 2000 is:
% % % % %

To match these
tax-free yields:

Your taxable investment would have to earn the following yield:

A fund may invest a portion of its assets in obligations that are
subject to state or federal income taxes. When a fund invests in these
obligations, its tax-equivalent yield will be lower. In the table
above, the tax-equivalent yields are calculated assuming investments
are 100% federally and state tax-free.

RETURN CALCULATIONS. Returns quoted in advertising reflect all aspects
of a fund's return, including the effect of reinvesting dividends and
capital gain distributions, and any change in a fund's NAV over a
stated period. A cumulative return reflects actual performance over a
stated period of time. Average annual returns are calculated by
determining the growth or decline in value of a hypothetical
historical investment in a fund over a stated period, and then
calculating the annually compounded percentage rate that would have
produced the same result if the rate of growth or decline in value had
been constant over the period. For example, a cumulative return of
100% over ten years would produce an average annual return of 7.18%,
which is the steady annual rate of return that would equal 100% growth
on a compounded basis in ten years. While average annual returns are a
convenient means of comparing investment alternatives, investors
should realize that a fund's performance is not constant over time,
but changes from year to year, and that average annual returns
represent averaged figures as opposed to the actual year-to-year
performance of a fund.

In addition to average annual returns, a fund may quote unaveraged or
cumulative returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative returns
may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a
series of redemptions, over any time period. Returns may be broken
down into their components of income and capital (including capital
gains and changes in share price) in order to illustrate the
relationship of these factors and their contributions to return.
Returns may be quoted on a before-tax or after-tax basis. Returns may
or may not include the effect of a fund's account closeout fee or the
small account fee. Excluding a fund's small account fee or account
closeout fee from a return calculation produces a higher return
figure. Returns, yields and other performance information may be
quoted numerically or in a table, graph, or similar illustration.

NET ASSET VALUE. Charts and graphs using a fund's NAVs, adjusted NAVs,
and benchmark indexes may be used to exhibit performance. An adjusted
NAV includes any distributions paid by a fund and reflects all
elements of its return. Unless otherwise indicated, a fund's adjusted
NAVs are not adjusted for sales charges, if any.

HISTORICAL BOND FUND RESULTS. The following table shows the
fund's yield, tax-equivalent yield, and returns for the fiscal periods
ended January 31, 2000.

HISTORICAL MONEY MARKET FUND RESULTS. The following table
shows each fund's 7-day yield, tax-equivalent yield, and returns for
the fiscal periods ended January 31, 2000.

The tax-equivalent yields for Massachusetts Municipal Money Market,
Spartan Massachusetts Municipal Money Market, and Spartan
Massachusetts Municipal Income are based on a combined effective
federal and state income tax rate of __%. As of January 31,
2000, an estimated __%, __%, and __% of each fund's income
was subject to state taxes. Note that each fund may invest in
securities whose income is subject to the federal alternative minimum
tax.

Average Annual Returns

Seven-Day Yield Tax- Equivalent Yield One Year Five Years Ten Years

MA Municipal Money Market __% % % % %

Average Annual Returns

Seven-Day Yield Tax- Equivalent Yield One Year Five Years Life of Fund*

Spartan MA Municipal Money % % % % %
Market

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cumulative Returns

One Year Five Years Ten Years

MA Municipal Money Market % % %

Cumulative Returns

One Year Five Years Life of Fund*

Spartan MA Municipal Money % % %
Market

</TABLE>

* From March 4, 1991 (commencement of operations).

Average Annual Returns

Thirty-Day Yield Tax- Equivalent Yield One Year Five Years Ten Years

Spartan MA Municipal Income % % % % %

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cumulative Returns

One Year Five Years Ten Years

Spartan MA Municipal Income % % %

</TABLE>

[The returns in the preceding table do not include the effect of
the $5 account closeout fee for Spartan Massachusetts Municipal Money
Market.] [The returns in the preceding table include the effect of the
$5 account closeout fee based on an average size account for Spartan
Massachusetts Municipal Money Market.]

[Note: If FMR had not reimbursed certain fund expenses during these
periods, Spartan Massachusetts Municipal Income's returns would have
been lower.]

[Note: If FMR had not reimbursed certain fund expenses during these
periods, Spartan Massachusetts Municipal Income's yield and tax
equivalent yield would have been ___% and __%, respectively.]

The following tables show the income and capital elements of each
fund's cumulative return. The tables compare each fund's return to the
record of the Standard & Poor's 500 Index (S&P 500), the Dow Jones
Industrial Average (DJIA), and the cost of living, as measured by the
Consumer Price Index (CPI), over the same period. The S&P 500 and DJIA
comparisons are provided to show how each fund's return compared to
the record of a market capitalization-weighted index of common
stocks and a narrower set of stocks of major industrial companies,
respectively, over the same period. Because each fund invests in
fixed-income securities, common stocks represent a different type of
investment from the funds. Common stocks generally offer greater
growth potential than the funds, but generally experience greater
price volatility, which means greater potential for loss. In addition,
common stocks generally provide lower income than fixed-income
investments such as the funds. The S&P 500 and DJIA returns are based
on the prices of unmanaged groups of stocks and, unlike each fund's
returns, do not include the effect of brokerage commissions or other
costs of investing.

The following tables show the growth in value of a hypothetical
$10,000 investment in each fund during the 10-year period ended
January 31, 2000 or life of fund , as applicable,
assuming all distributions were reinvested. Returns are based on past
results and are not an indication of future performance. Tax
consequences of different investments have not been factored into the
figures below.

During the 10-year period ended January 31, 2000, a hypothetical
$10,000 investment in Massachusetts Municipal Money Market would have
grown to $ __ .

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
MASSACHUSETTS MUNICIPAL MONEY
MARKET FUND

Fiscal Year Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
January 31 Investment Distributions Gain Distributions

2000 $ $ $ $

1999 $ $ $ $

1998 $ $ $ $

1997 $ $ $ $

1996 $ $ $ $

1995 $ $ $ $

1994 $ $ $ $

1993 $ $ $ $

1992 $ $ $ $

1991 $ $ $ $

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
MASSACHUSETTS MUNICIPAL MONEY INDEXES
MARKET FUND

Fiscal Year Ended S&P 500 DJIA Cost of Living
January 31

2000 $ $ $

1999 $ $ $

1998 $ $ $

1997 $ $ $

1996 $ $ $

1995 $ $ $

1994 $ $ $

1993 $ $ $

1992 $ $ $

1991 $ $ $

</TABLE>

Explanatory Notes: With an initial investment of $10,000 in Fidelity
Massachusetts Municipal Money Market on February 1, 1990 , the
net amount invested in fund shares was $10,000. The cost of the
initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ __ . If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller,
and cash payments for the period would have amounted to $ __ for
dividends. [The fund did not distribute any capital gains during the
period.]

During the period from March 4, 1991 (commencement of operations) to
January 31, 2000, a hypothetical $10,000 investment in Spartan
Massachusetts Municipal Money Market would have grown to $ ___ .

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SPARTAN MASSACHUSETTS
MUNICIPAL MONEY MARKET FUND

Fiscal Year Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
January 31 Investment Distributions Gain Distributions

2000 $ $ $ $

1999 $ $ $ $

1998 $ $ $ $

1997 $ $ $ $

1996 $ $ $ $

1995 $ $ $ $

1994 $ $ $ $

1993 $ $ $ $

1992* $ $ $ $

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
SPARTAN MASSACHUSETTS INDEXES
MUNICIPAL MONEY MARKET FUND

Fiscal Year Ended S&P 500 DJIA Cost of Living
January 31

2000 $ $ $

1999 $ $ $

1998 $ $ $

1997 $ $ $

1996 $ $ $

1995 $ $ $

1994 $ $ $

1993 $ $ $

1992* $ $ $

</TABLE>

* From March 4, 1991 (commencement of operations).

** From month-end closest to initial investment date.

Explanatory Notes: With an initial investment of $10,000 in Spartan
Massachusetts Municipal Money Market on March 4, 1991, the net amount
invested in fund shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to $ __.
If distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $ ___ for
dividends. [The fund did not distribute any capital gains during the
period.] [The figures in the table do not include the effect of the
fund's account closeout fee.]

During the 10-year period ended January 31, 2000, a hypothetical
$10,000 investment in Spartan Massachusetts Municipal Income would
have grown to $ __ .

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SPARTAN MASSACHUSETTS INDEXES
MUNICIPAL INCOME FUND

Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
January 31 Investment Distributions Gain Distributions

2000 $ $ $ $ $

1999 $ $ $ $ $

1998 $ $ $ $ $

1997 $ $ $ $ $

1996 $ $ $ $ $

1995 $ $ $ $ $

1994 $ $ $ $ $

1993 $ $ $ $ $

1992 $ $ $ $ $

1991 $ $ $ $ $

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
SPARTAN MASSACHUSETTS INDEXES
MUNICIPAL INCOME FUND

Fiscal Year Ended DJIA Cost of Living
January 31

2000 $ $

1999 $ $

1998 $ $

1997 $ $

1996 $ $

1995 $ $

1994 $ $

1993 $ $

1992 $ $

1991 $ $

</TABLE>

Explanatory Notes: With an initial investment of $10,000 in
Spartan Massachusetts Municipal Income on February 1,
1990 , the net amount invested in fund shares was $10,000. The cost
of the initial investment ($10,000) together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ __ . If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller,
and cash payments for the period would have amounted to $ __ for
dividends and $__ for capital gain distributions .

PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Inc. (Lipper), an
independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rankings are based on
return, assume reinvestment of distributions, do not take sales
charges or trading fees into consideration, and are prepared without
regard to tax consequences. Lipper may also rank based on yield. In
addition to the mutual fund rankings, a fund's performance may be
compared to stock, bond, and money market mutual fund performance
indexes prepared by Lipper or other organizations. When comparing
these indexes, it is important to remember the risk and return
characteristics of each type of investment. For example, while stock
mutual funds may offer higher potential returns, they also carry the
highest degree of share price volatility. Likewise, money market funds
may offer greater stability of principal, but generally do not offer
the higher potential returns available from stock mutual funds.

From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and
periodicals. For example, a fund may quote Morningstar, Inc. in its
advertising materials. Morningstar, Inc. is a mutual fund rating
service that rates mutual funds on the basis of risk-adjusted
performance. Rankings that compare the performance of Fidelity funds
to one another in appropriate categories over specific periods of time
may also be quoted in advertising. A bond fund may advertise risk
ratings, including symbols or numbers, prepared by independent rating
agencies.

A fund's performance may also be compared to that of each benchmark
index representing the universe of securities in which the fund may
invest. The return of each index reflects reinvestment of all
dividends and capital gains paid by securities included in each index.
Unlike a fund's returns, however, each index's returns do not reflect
brokerage commissions, transaction fees, or other costs of investing
directly in the securities included in the index.

The municipal bond fund may compare its performance to the Lehman
Brothers Municipal Bond Index, a market value-weighted index for
investment-grade municipal bonds with maturities of one year or more.
Issues included in the index have been issued after December 31, 1990,
have an outstanding par value of at least $3 million, and have been
issued as part of an offering of at least $50 million. Subsequent
to December 31, 1995, zero coupon bonds and issues subject to the
alternative minimum tax were excluded from the index.

Spartan Massachusetts Municipal Income may also compare its
performance to that of the Lehman Brothers Massachusetts Enhanced
Municipal Bond Index, a market value-weighted index of
Massachusetts investment-grade municipal bonds with maturities of one
year or more. Issues included in the index have been issued as part of
an offering of at least $20 million, have an outstanding par value of
at least $2 million, and have been issued after December 31, 1990.

A fund may be compared in advertising to Certificates of Deposit (CDs)
or other investments issued by banks or other depository institutions.
Mutual funds differ from bank investments in several respects. For
example, a fund may offer greater liquidity or higher potential
returns than CDs, a fund does not guarantee your principal or your
return, and fund shares are not FDIC insured.

Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
services.

Ibbotson Associates of Chicago, Illinois (Ibbotson) provides
historical returns of the capital markets in the United States,
including common stocks, small capitalization stocks, long-term
corporate bonds, intermediate-term government bonds, long-term
government bonds, Treasury bills, the U.S. rate of inflation (based on
the CPI), and combinations of various capital markets. The performance
of these capital markets is based on the returns of different indexes.

Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with
the security types in any capital market may or may not correspond
directly to those of the funds. Ibbotson calculates returns in the
same method as the funds. The funds may also compare performance to
that of other compilations or indexes that may be developed and made
available in the future.

A money market fund may compare its performance or the performance of
securities in which it may invest to averages published by IBC
Financial Data, Inc. of Ashland, Massachusetts. These averages assume
reinvestment of distributions. IBC's MONEY FUND REPORT
AVERAGES(trademark)/All Tax-Free, which is reported in IBC's MONEY
FUND REPORT(trademark), covers over ___ tax-free money market
funds.

The bond fund may compare and contrast in advertising the relative
advantages of investing in a mutual fund versus an individual
municipal bond. Unlike municipal bond mutual funds, individual
municipal bonds offer a stated rate of interest and, if held to
maturity, repayment of principal. Although some individual municipal
bonds might offer a higher return, they do not offer the reduced risk
of a mutual fund that invests in many different securities. The sales
charges of many municipal bond mutual funds are lower than the
purchase cost of individual municipal bonds, which are generally
subject to direct brokerage costs.

In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; brokerage products and services; model
portfolios or allocations; saving for college or other goals; and
charitable giving. In addition, Fidelity may quote or reprint
financial or business publications and periodicals as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services
and products. Fidelity may also reprint, and use as advertising and
sales literature, articles from Fidelity Focus(Registered trademark),
a quarterly magazine provided free of charge to Fidelity fund
shareholders.

A fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manager.

VOLATILITY. A bond fund may quote various measures of volatility and
benchmark correlation in advertising. In addition, the fund may
compare these measures to those of other funds. Measures of volatility
seek to compare the fund's historical share price fluctuations or
returns to those of a benchmark. Measures of benchmark correlation
indicate how valid a comparative benchmark may be. All measures of
volatility and correlation are calculated using averages of historical
data. In advertising, a bond fund may also discuss or illustrate
examples of interest rate sensitivity.

MOMENTUM INDICATORS indicate price movements over specific periods of
time for a bond fund. Each point on the momentum indicator represents
the fund's percentage change in price movements over that period.

A bond fund may advertise examples of the effects of periodic
investment plans, including the principle of dollar cost averaging. In
such a program, an investor invests a fixed dollar amount in a fund at
periodic intervals, thereby purchasing fewer shares when prices are
high and more shares when prices are low. While such a strategy does
not assure a profit or guard against loss in a declining market, the
investor's average cost per share can be lower than if fixed numbers
of shares are purchased at the same intervals. In evaluating such a
plan, investors should consider their ability to continue purchasing
shares during periods of low price levels.

As of January 31, 2000, FMR advised over $__ billion in
municipal fund assets, $__ billion in taxable fixed-income fund
assets, $__ billion in money market fund assets, $___ billion
in equity fund assets, $__ billion in international fund
assets, and $___ billion in Spartan fund assets. The funds may
reference the growth and variety of money market mutual funds and the
adviser's innovation and participation in the industry. The equity
funds under management figure represents the largest amount of equity
fund assets under management by a mutual fund investment adviser in
the United States, making FMR America's leading equity (stock) fund
manager. FMR, its subsidiaries, and affiliates maintain a worldwide
information and communications network for the purpose of researching
and managing investments abroad.

In addition to performance rankings, a fund may compare its total
expense ratio to the average total expense ratio of similar funds
tracked by Lipper. A fund's total expense ratio is a significant
factor in comparing bond and money market investments because of its
effect on yield.

ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION

A fund may make redemption payments in whole or in part in
readily marketable securities or other property, valued for
this purpose as they are valued in computing each fund's NAV, if
FMR determines it is in the best interests of the fund.
Shareholders that receive securities or other property on
redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.

DISTRIBUTIONS AND TAXES

DIVIDENDS. To the extent that each fund's income is designated as
federally tax-exempt interest, the dividends declared by the fund are
also federally tax-exempt. Short-term capital gains are taxable as
dividends, but do not qualify for the dividends-received deduction.

Each fund purchases municipal securities whose interest FMR believes
is free from federal income tax. Generally, issuers or other parties
have entered into covenants requiring continuing compliance with
federal tax requirements to preserve the tax-free status of interest
payments over the life of the security. If at any time the covenants
are not complied with, or if the IRS otherwise determines that the
issuer did not comply with relevant tax requirements, interest
payments from a security could become federally taxable retroactive to
the date the security was issued. For certain types of structured
securities, the tax status of the pass-through of tax-free income may
also be based on the federal and state tax treatment of the
structure.

Interest on certain "private activity" securities is subject to the
federal alternative minimum tax (AMT), although the interest continues
to be excludable from gross income for other tax purposes .
Interest from private activity securities is a tax preference item
for the purposes of determining whether a taxpayer is subject to the
AMT and the amount of AMT to be paid, if any.

A portion of the gain on municipal bonds purchased at market discount
after April 30, 1993 is taxable to shareholders as ordinary income,
not as capital gains.

MASSACHUSETTS TAXES. To the extent the funds' income dividends are
derived from state tax-free securities, they will be free from
Massachusetts personal income tax. Other distributions from the funds,
including those related to long- and short-term capital gains,
generally will not be exempt from Massachusetts personal income tax.
Corporate taxpayers should note that the funds' income dividends and
other distributions are not exempt from Massachusetts' corporate
excise tax.

CAPITAL GAIN DISTRIBUTIONS. Each fund's long-term capital gain
distributions are federally taxable to shareholders generally as
capital gains. Each money market fund may distribute any net realized
capital gains once a year or more often, as necessary.

[As of January 31 , 2000, [__] had a capital loss
carryforward aggregating approximately $____. This loss carryforward,
of which $___, $___, and $___will expire on January 31 , 199_,
____, and ____ , respectively, is available to offset future capital
gains.]

TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal
Revenue Code so that it will not be liable for federal tax on income
and capital gains distributed to shareholders. In order to qualify as
a regulated investment company, and avoid being subject to federal
income or excise taxes at the fund level, each fund intends to
distribute substantially all of its net investment income and net
realized capital gains within each calendar year as well as on a
fiscal year basis, and intends to comply with other tax rules
applicable to regulated investment companies.

OTHER TAX INFORMATION. The information above is only a summary of some
of the tax consequences generally affecting each fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. It is up to you or your tax preparer to determine
whether the sale of shares of a fund resulted in a capital gain or
loss or other tax consequence to you. In addition to federal income
taxes, shareholders may be subject to state and local taxes on fund
distributions, and shares may be subject to state and local personal
property taxes. Investors should consult their tax advisers to
determine whether a fund is suitable to their particular tax
situation.

TRUSTEES AND OFFICERS

The Trustees, Members of the Advisory Board, and executive officers of
the trust are listed below. The Board of Trustees governs each fund
and is responsible for protecting the interests of shareholders. The
Trustees are experienced executives who meet periodically throughout
the year to oversee each fund's activities, review contractual
arrangements with companies that provide services to each fund, and
review each fund's performance. Except as indicated, each individual
has held the office shown or other offices in the same company for the
last five years. All persons named as Trustees and Members of the
Advisory Board also serve in similar capacities for other funds
advised by FMR or its affiliates. The business address of each
Trustee, Member of the Advisory Board, and officer who is an
"interested person" (as defined in the 1940 Act) is 82 Devonshire
Street, Boston, Massachusetts 02109, which is also the address of FMR.
The business address of all the other Trustees is Fidelity
Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235. Those
Trustees who are "interested persons" by virtue of their affiliation
with either the trust or FMR are indicated by an asterisk (*).

*EDWARD C. JOHNSON 3d (68), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman
of the Board and of the Executive Committee of FMR; Chairman and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.; and a Director of FDC. Abigail Johnson,
Member of the Advisory Board of Fidelity Massachusetts Municipal
Trust, is Mr. Johnson's daughter.

ABIGAIL P. JOHNSON (37), Member of the Advisory Board of Fidelity
Massachusetts Municipal Trust (1999), is Vice President of certain
Equity Funds (1997), and is a Director of FMR Corp. (1994). Before
assuming her current responsibilities, Ms. Johnson managed a number of
Fidelity funds. Edward C. Johnson 3d, Trustee and President of the
Funds, is Ms. Johnson's father.

J. GARY BURKHEAD (57), Member of the Advisory Board (1997), is Vice
Chairman and a Member of the Board of Directors of FMR Corp. (1997)
and President of Fidelity Personal Investments and Brokerage Group
(1997). Previously, Mr. Burkhead served as President of Fidelity
Management & Research Company.

RALPH F. COX (66), Trustee, is President of RABAR Enterprises
(management consulting-engineering industry, 1994). Prior to February
1994, he was President of Greenhill Petroleum Corporation (petroleum
exploration and production). Until March 1990, Mr. Cox was President
and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Waste
Management Inc. (non-hazardous waste, 1993), CH2M Hill
Companies (engineering), and Bonneville Pacific (independent power
and petroleum production). In addition, he is a member of advisory
boards of Texas A&M University and the University of Texas at Austin.

PHYLLIS BURKE DAVIS (67), Trustee. Mrs. Davis is retired from Avon
Products, Inc. where she held various positions including Senior
Vice President of Corporate Affairs and Group Vice President of
U.S. sales, distribution, and manufacturing. She is currently a
Director of BellSouth Corporation (telecommunications), Eaton
Corporation (manufacturing), and the TJX Companies, Inc. (retail
stores), and previously served as a Director of Hallmark Cards,
Inc., Nabisco Brands, Inc. , and Standard Brands, Inc. In addition,
she is a member of the Board of Directors of the Southampton Hospital
in Southampton, N.Y. (1998).

ROBERT M. GATES (55), Trustee (1997), is a consultant, author, and
lecturer (1993). Mr. Gates was Director of the Central Intelligence
Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates served as
Assistant to the President of the United States and Deputy National
Security Advisor. Mr. Gates is a Director of Charles Stark Draper
Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (automotive, space, defense, and
information technology). Mr. Gates previously served as a Director of
LucasVarity PLC (automotive components and diesel engines). He is
currently serving as Dean of the George Bush School of Government and
Public Service at Texas A & M University (1999-2000). Mr. Gates
also is a Trustee of the Forum for International Policy and of the
Endowment Association of the College of William and Mary. In addition,
he is a member of the National Executive Board of the Boy Scouts of
America.

DONALD J. KIRK (66), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business. From 1987 to January
1995, Mr. Kirk was a Professor at Columbia University Graduate School
of Business. Prior to 1987, he was Chairman of the Financial
Accounting Standards Board. Mr. Kirk previously served as a Director
of General Re Corporation (reinsurance, 1987-1998) and as a
Director of Valuation Research Corp. (appraisals and valuations,
1993-1995). He serves as Chairman of the Board of Directors of
National Arts Stabilization Inc., Chairman of the Board of Trustees of
the Greenwich Hospital Association, Director of the Yale-New Haven
Health Services Corp. (1998), Vice Chairman of the Public
Oversight Board of the American Institute of Certified Public
Accountants' SEC Practice Section (1995), and as a Public Governor of
the National Association of Securities Dealers, Inc. (1996).

NED C. LAUTENBACH (55), Trustee (2000), has been a partner of
Clayton, Dubilier & Rice, Inc. (private equity investment firm) since
September 1998. Mr. Lautenbach was Senior Vice President of IBM
Corporation from 1992 until his retirement in July 1998. From 1993 to
1995 he was Chairman of IBM World Trade Corporation. He also was a
member of IBM's Corporate Executive Committee from 1994 to July 1998.
He is a Director of PPG Industries Inc. (glass, coating and chemical
manufacturer), Dynatech Corporation (global communications equipment),
Eaton Corporation (global manufacturer of highly engineered products)
and ChoicePoint Inc. (data identification, retrieval, storage, and
analysis).

*PETER S. LYNCH (56), Trustee, is Vice Chairman and Director of FMR.
Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice
President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). In addition, he
serves as a Trustee of Boston College, Massachusetts Eye & Ear
Infirmary, Historic Deerfield (1989) and Society for the Preservation
of New England Antiquities, and as an Overseer of the Museum of Fine
Arts of Boston.

WILLIAM O. McCOY (65), Trustee (1997), is the Interim Chancellor
for the University of North Carolina at Chapel Hill. Previously he had
served from 1995 through 1998 as Vice President of Finance for the
University of North Carolina (16-school system). Prior to his
retirement in December 1994, Mr. McCoy was Vice Chairman of the Board
of BellSouth Corporation (telecommunications, 1984) and President of
BellSouth Enterprises (1986). He is currently a Director of Liberty
Corporation (holding company, 1984), Duke-Weeks Realty Corporation
(real estate, 1994), Carolina Power and Light Company (electric
utility, 1996), the Kenan Transport Company (trucking, 1996), and
Dynatech Corporation (electronics, 1999). Previously, he was a
Director of First American Corporation (bank holding company,
1979-1996). In addition, Mr. McCoy served as a member of the Board of
Visitors for the University of North Carolina at Chapel Hill
(1994-1998) and currently serves on the Board of Visitors of
the Kenan-Flager Business School (University of North Carolina at
Chapel Hill, 1988).

GERALD C. McDONOUGH (70), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director and Chairman of the
Board of York International Corp. (air conditioning and
refrigeration), Commercial Intertech Corp. (hydraulic systems,
building systems, and metal products, 1992), CUNO, Inc. (liquid and
gas filtration products, 1996), and Associated Estates Realty
Corporation (a real estate investment trust, 1993). Mr. McDonough
served as a Director of ACME-Cleveland Corp. (metal working,
telecommunications, and electronic products) from 1987-1996 and
Brush-Wellman Inc. (metal refining) from 1983-1997.

MARVIN L. MANN (65), Trustee (1993), is Chairman Emeritus, of
Lexmark International, Inc. (office machines, 1991) where he still
remains a member of the Board. Prior to 1991, he held the
positions of Vice President of International Business Machines
Corporation ("IBM") and President and General Manager of various IBM
divisions and subsidiaries. Mr. Mann is a Director of M.A. Hanna
Company (chemicals, 1993), Imation Corp. (imaging and information
storage, 1997). He is a Board member of Dynatech Corporation
(electronics, 1999).

*ROBERT C. POZEN (52), Trustee (1997) and Senior Vice President, is
also President and a Director of FMR (1997); and President and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc. (1997), and Fidelity
Management & Research (Far East) Inc. (1997). Previously, Mr. Pozen
served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp.

THOMAS R. WILLIAMS (70), Trustee, is President of The Wales Group,
Inc. (management and financial advisory services). Prior to retiring
in 1987, Mr. Williams served as Chairman of the Board of First
Wachovia Corporation (bank holding company), and Chairman and Chief
Executive Officer of The First National Bank of Atlanta and First
Atlanta Corporation (bank holding company). He is currently a Director
of National Life Insurance Company of Vermont and American
Software, Inc. Mr. Williams was previously a Director of ConAgra, Inc.
(agricultural products), Georgia Power Company (electric utility), and
Avado, Inc. (restaurants).

DWIGHT D. CHURCHILL ( 46 ), is Vice President of Bond Funds,
Group Leader of the Bond Group, Senior Vice President of FMR (1997),
and Vice President of FIMM (1998). Mr. Churchill joined Fidelity in
1993 as Vice President and Group Leader of Taxable Fixed-Income
Investments.

BOYCE I. GREER ( 43 ), is Vice President of Money Market Funds
(1997), Group Leader of the Money Market Group (1997), Senior Vice
President of FMR (1997), and Vice President of FIMM (1998). Mr. Greer
served as the Leader of the Fixed-Income Group for Fidelity Management
Trust Company (1993-1995) and was Vice President and Group Leader of
Municipal Fixed-Income Investments (1996-1997).

FRED L. HENNING, JR. ( 60 ), is Vice President of Fidelity's
Fixed-Income Group (1995), Senior Vice President of FMR (1995), and
Senior Vice President of FIMM (1998). Before assuming his current
responsibilities, Mr. Henning was head of Fidelity's Money Market
Division.

BART A. GRENIER (41), is Vice President of certain High-Income
Bond Funds (1997) and certain Equity Funds (1999). Mr. Grenier
rejoined Fidelity in August 1997 from DDJ Capital Management, LLC,
where he had served as Managing Director since April 1997. Mr. Grenier
originally joined Fidelity in 1991 as a senior analyst. Mr. Grenier
served as a Director of High-Income Group Research and as Director of
U.S. Equity Research from 1994 to March 1996. He later became Group
Leader of the Income-Growth and Asset Allocation-Income Groups in 1996
and Assistant Equity Division Head in 1997.

SCOTT A. ORR (36), is Vice President and manager of Fidelity
Massachusetts Municipal Money Market and Spartan Massachusetts
Municipal Market, which he has managed since November 1997. He also
manages other Fidelity funds. Since joining Fidelity in 1989, Mr. Orr
has worked as an analyst and manager.

CHRISTINE THOMPSON (40), is Vice President of Spartan Massachusetts
Municipal Income Fund, which she has managed since July 1998. She also
manages other Fidelity funds. Since joining Fidelity in 1985, Ms.
Thompson has worked as a senior analyst and portfolio manager.

ERIC D. ROITER (51), Secretary (1998), is Vice President (1998) and
General Counsel of FMR (1998) and Vice President and Clerk of FDC
(1998). Prior to joining Fidelity, Mr. Roiter was with the law firm of
Debevoise & Plimpton, as an associate (1981-1984) and as a partner
(1985-1997), and served as an Assistant General Counsel of the U.S.
Securities and Exchange Commission (1979-1981). Mr. Roiter was an
Adjunct Member, Faculty of Law, at Columbia University Law School
(1996-1997).

RICHARD A. SILVER (52), Treasurer (1997), is Treasurer of the Fidelity
funds and is an employee of FMR (1997). Before joining FMR, Mr. Silver
served as Executive Vice President, Fund Accounting & Administration
at First Data Investor Services Group, Inc. (1996-1997). Prior to
1996, Mr. Silver was Senior Vice President and Chief Financial Officer
at The Colonial Group, Inc. Mr. Silver also served as Chairman of the
Accounting/Treasurer's Committee of the Investment Company Institute
(1987-1993).

MARIA F. DWYER (41), Deputy Treasurer (2000), is Deputy Treasurer
of the Fidelity funds and is a Vice President (1999) and an employee
(1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director
of Compliance for MFS Investment Management.

MATTHEW N. KARSTETTER (37), Deputy Treasurer (1998), is Deputy
Treasurer of the Fidelity funds and is an employee of FMR (1998).
Before joining FMR, Mr. Karstetter served as Vice President of
Investment Accounting and Treasurer of IDS Mutual Funds at American
Express Financial Advisors (1996-1998). Prior to 1996, Mr. Karstetter
was Vice President, Mutual Fund Services at State Street Bank & Trust
(1991-1996).

STANLEY N. GRIFFITH (52), Assistant Vice President (1998), is
Assistant Vice President of Fidelity's Fixed-Income Funds (1998) and
an employee of FMR Corp.

JOHN H. COSTELLO (52), Assistant Treasurer, is an employee of FMR.

THOMAS J. SIMPSON (40), Assistant Treasurer (1996), is Assistant
Treasurer of Fidelity's Fixed-Income Funds (1998) and an employee of
FMR (1996). Prior to joining FMR, Mr. Simpson was Vice President and
Fund Controller of Liberty Investment Services (1987-1995).

The following table sets forth information describing the compensation
of each Trustee and Member of the Advisary Board of each fund for his
or her services for the fiscal year ended January 31, 2000, or
calendar year ended December 31, 1999 , as applicable.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMPENSATION TABLE

Trustees and Members of the Aggregate Compensation from Aggregate Compensation from Aggregate Compensation from
Advisory Board from MA Muni Money MarketB Spartan MA Muni Money MarketB Spartan MA Muni IncomeB

Edward C. Johnson 3d ** $ 0 $ 0 $ 0

Abigail P. Johnson ** $ 0 $ 0 $ 0

J. Gary Burkhead ** $ 0 $ 0 $ 0

Ralph F. Cox $ $ $

Phyllis Burke Davis $ $ $

Robert M. Gates $ $ $

E. Bradley Jones**** $ $ $

Donald J. Kirk $ $ $

Ned C. Lautenbach*** $ $ $

Peter S. Lynch ** $ 0 $ 0 $ 0

William O. McCoy $ $ $

Gerald C. McDonough $ $ $

Marvin L. Mann $ $ $

Robert C. Pozen** $ 0 $ 0 $ 0

Thomas R. Williams $ $ $

</TABLE>

<TABLE>
<CAPTION>
<S> <C>
COMPENSATION TABLE

Trustees and Members of the Total Compensation from the
Advisory Board Fund Complex* A

Edward C. Johnson 3d ** $ 0

Abigail P. Johnson ** $ 0

J. Gary Burkhead ** $ 0

Ralph F. Cox $ 217,500

Phyllis Burke Davis $ 211,500

Robert M. Gates $217,500

E. Bradley Jones**** $217,500

Donald J. Kirk $ 217,500

Ned C. Lautenbach*** $54,000

Peter S. Lynch ** $ 0

William O. McCoy $ 214,500

Gerald C. McDonough $ 269,000

Marvin L. Mann $ 217,500

Robert C. Pozen** $ 0

Thomas R. Williams $213,000

</TABLE>

* Information is for the calendar year ended December 31, 1999 for 236
funds in the complex.

** Interested Trustees of the funds, Ms. Johnson and Mr. Burkhead are
compensated by FMR.

*** During the period from October 14, 1999 through December 31, 1999,
Mr. Lautenbach served as a Member of the Advisory Board. Effective
January 1, 2000, Mr. Lautenbach serves as a Member of the Board of
Trustees.

**** Mr. Jones served on the Board of Trustees through December 31,
1999.

A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1999 , the Trustees accrued
required deferred compensation from the funds as follows: Ralph F.
Cox, $75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $75,000;
E. Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $ 53,735 ; William O. McCoy,
$ 53,735 , and Thomas R. Williams, $ 62,319 .

[B Compensation figures include cash, and may include amounts
required to be deferred and amounts deferred at the election of
Trustees.]

[C The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $__; Phyllis Burke Davis, $__;
Robert M. Gates, $__; E. Bradley Jones, $__; Donald J. Kirk, $__;
William O. McCoy, $__; Gerald C. McDonough, $__; Marvin L. Mann, $__;
and Thomas R. Williams, $__.]

[ D The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $__; Phyllis Burke Davis, $__;
Robert M. Gates, $__; E. Bradley Jones, $__; Donald J. Kirk, $__;
William O. McCoy, $__; Gerald C. McDonough, $__; Marvin L. Mann, $__;
and Thomas R. Williams, $__.]

[ E The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $__; Phyllis Burke Davis, $__;
Robert M. Gates, $__; E. Bradley Jones, $__; Donald J. Kirk, $__;
William O. McCoy, $__; Gerald C. McDonough, $__; Marvin L. Mann, $__;
and Thomas R. Williams, $__.]

[F Certain of the non-interested Trustees' aggregate compensation
from a fund includes accrued voluntary deferred compensation as
follows: [__, __, __]; and [__, __, __].]

Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.

[ As of January 31, 2000, approximately __% of [__]'s total
outstanding shares was held by [FMR and an FMR affiliate]. FMR Corp.
is the ultimate parent company of FMR and these FMR affiliates]. By
virtue of their ownership interest in FMR Corp., as described in the
"Control of Investment Advisers" section on page ___, Mr. Edward C.
Johnson 3d, President and Trustee of the fund, and Ms. Abigail P.
Johnson, Member of the Advisory Board of the fund, may be deemed to
be a beneficial owner of these shares. As of the above date, with the
exception of Mr. Johnson 3d's and Ms. Johnson's deemed ownership of
[__]'s shares, the Trustees, Members of the Advisory Board, and
officers of the funds owned, in the aggregate, less than __% of each
fund's total outstanding shares.]

[ As of January 31, 2000, the Trustees, Members of the Advisory
Board, and officers of each fund owned, in the aggregate, less than
__% of each fund's total outstanding shares.]

[As of January 31, 2000, the following owned of record or
beneficially 5% or more (up to and including 25%) of each fund's
outstanding shares:

[As of January 31, 2000, approximately ____% of [__]'s total
outstanding shares were held by [__]; approximately ___% of [__]'s
total outstanding shares were held by [__]; and approximately ___% of
[__]'s total outstanding shares were held by [__.]

[ A shareholder owning of record or beneficially more than 25% of a
fund's outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other
shareholders.]

CONTROL OF INVESTMENT ADVISERS

FMR Corp., organized in 1972, is the ultimate parent company of FMR
and FIMM. The voting common stock of FMR Corp. is divided into two
classes. Class B is held predominantly by members of the Edward C.
Johnson 3d family and is entitled to 49% of the vote on any matter
acted upon by the voting common stock. Class A is held predominantly
by non-Johnson family member employees of FMR Corp. and its affiliates
and is entitled to 51% of the vote on any such matter. The Johnson
family group and all other Class B shareholders have entered into a
shareholders' voting agreement under which all Class B shares will be
voted in accordance with the majority vote of Class B shares. Under
the 1940 Act, control of a company is presumed where one individual or
group of individuals owns more than 25% of the voting stock of that
company. Therefore, through their ownership of voting common stock and
the execution of the shareholders' voting agreement, members of the
Johnson family may be deemed, under the 1940 Act, to form a
controlling group with respect to FMR Corp.

At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.

Fidelity investment personnel may invest in securities for their own
investment accounts pursuant to a code of ethics that sets forth all
employees' fiduciary responsibilities regarding the funds, establishes
procedures for personal investing and restricts certain transactions.
For example, all personal trades in most securities require
pre-clearance, and participation in initial public offerings is
prohibited. In addition, restrictions on the timing of personal
investing in relation to trades by Fidelity funds and on short-term
trading have been adopted.

MANAGEMENT CONTRACTS

Each fund has entered into a management contract with FMR, pursuant to
which FMR furnishes investment advisory and other services.

MANAGEMENT SERVICES. Under the terms of its management contract with
each fund, FMR acts as investment adviser and, subject to the
supervision of the Board of Trustees, directs the investments of the
fund in accordance with its investment objective, policies and
limitations. FMR also provides each fund with all necessary office
facilities and personnel for servicing the fund's investments,
compensates all officers of each fund and all Trustees who are
"interested persons" of the trust or of FMR, and all personnel of each
fund or FMR performing services relating to research, statistical and
investment activities.

In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include
providing facilities for maintaining each fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters and other persons dealing with each fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining each fund's records and the
registration of each fund's shares under federal securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for each fund; and furnishing
reports, evaluations and analyses on a variety of subjects to the
Trustees.

MANAGEMENT-RELATED EXPENSES (MASSACHUSETTS MUNICIPAL MONEY MARKET AND
SPARTAN MASSACHUSETTS MUNICIPAL INCOME). In addition to the management
fee payable to FMR and the fees payable to the transfer, dividend
disbursing, and shareholder servicing agent, and pricing and
bookkeeping agent, each fund pays all of its expenses that are not
assumed by those parties. Each fund pays for the typesetting,
printing, and mailing of its proxy materials to shareholders, legal
expenses, and the fees of the custodian, auditor, and non-interested
Trustees. Each fund's management contract further provides that the
fund will pay for typesetting, printing, and mailing prospectuses,
statements of additional information, notices, and reports to
shareholders; however, under the terms of each fund's transfer agent
agreement, the transfer agent bears the costs of providing these
services to existing shareholders. Other expenses paid by each fund
include interest, taxes, brokerage commissions, the fund's
proportionate share of insurance premiums and Investment Company
Institute dues, and the costs of registering shares under federal
securities laws and making necessary filings under state securities
laws. Each fund is also liable for such non-recurring expenses as may
arise, including costs of any litigation to which the fund may be a
party, and any obligation it may have to indemnify its officers and
Trustees with respect to litigation.

MANAGEMENT-RELATED EXPENSES (SPARTAN MASSACHUSETTS MUNICIPAL MONEY
MARKET). Under the terms of its management contract with the fund,
FMR is responsible for payment of all operating expenses of the fund
with certain exceptions. Specific expenses payable by FMR include
expenses for typesetting, printing, and mailing proxy materials to
shareholders, legal expenses, fees of the custodian, auditor, and
interested Trustees, the fund's proportionate share of insurance
premiums and Investment Company Institute dues, and the costs of
registering shares under federal securities laws and making necessary
filings under state securities laws. The fund's management contract
further provides that FMR will pay for typesetting, printing, and
mailing prospectuses, statements of additional information, notices,
and reports to shareholders; however, under the terms of the fund's
transfer agent agreement, the transfer agent bears the costs of
providing these services to existing shareholders. FMR also pays all
fees associated with transfer agent, dividend disbursing, and
shareholder services, and pricing and bookkeeping services.

FMR pays all other expenses of Spartan Massachusetts Municipal Money
Market with the following exceptions: fees and expenses of the
non-interested Trustees, interest, taxes, brokerage commissions (if
any), money market insurance premiums (beginning January 1, 2004)
for Spartan Massachusetts Municipal Money Market, and such
nonrecurring expenses as may arise, including costs of any litigation
to which the fund may be a party, and any obligation it may have to
indemnify its officers and Trustees with respect to litigation.

MANAGEMENT FEES. For the services of FMR under each management
contract, Spartan Massachusetts Municipal Money Market pays FMR a
monthly management fee at the annual rate of 0.50% of the fund's
average net assets throughout the month.

The management fee paid to FMR by Spartan Massachusetts Municipal
Money Market is reduced by an amount equal to the fees and expenses
paid by the fund to the non-interested Trustees.

For the services of FMR under the management contract, Massachusetts
Municipal Money Market and Spartan Massachusetts Municipal Income each
pays FMR a monthly management fee which has two components: a group
fee rate and an individual fund fee rate.

The group fee rate is based on the monthly average net assets of all
of the registered investment companies with which FMR has management
contracts.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate

0 - $3 billion .3700% $ 1 billion .3700%

3 - 6 .3400 50 .2188

6 - 9 .3100 100 .1869

9 - 12 .2800 150 .1736

12 - 15 .2500 200 .1652

15 - 18 .2200 250 .1587

18 - 21 .2000 300 .1536

21 - 24 .1900 350 .1494

24 - 30 .1800 400 .1459

30 - 36 .1750 450 .1427

36 - 42 .1700 500 .1399

42 - 48 .1650 550 .1372

48 - 66 .1600 600 .1349

66 - 84 .1550 650 .1328

84 - 120 .1500 700 .1309

120 - 156 .1450 750 .1291

156 - 192 .1400 800 .1275

192 - 228 .1350 850 .1260

228 - 264 .1300 900 .1246

264 - 300 .1275 950 .1233

300 - 336 .1250 1,000 .1220

336 - 372 .1225 1,050 .1209

372 - 408 .1200 1,100 .1197

408 - 444 .1175 1,150 .1187

444 - 480 .1150 1,200 .1177

480 - 516 .1125 1,250 .1167

516 - 587 .1100 1,300 .1158

587 - 646 .1080 1,350 .1149

646 - 711 .1060 1,400 .1141

711 - 782 .1040

782 - 860 .1020

860 - 946 .1000

946 - 1,041 .0980

1,041 - 1,145 .0960

1,145 - 1,260 .0940

Over 1,260 .0920

</TABLE>

The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $ ___ billion of group net assets - the approximate
level for January 2000 - was __ %, which is the weighted
average of the respective fee rates for each level of group net assets
up to $__ billion.

The individual fund fee rate for Massachusetts Municipal Money Market
and Spartan Massachusetts Municipal Income is 0.25 %. Based on
the average group net assets of the funds advised by FMR for January
2000, each fund's annual management fee rate would be
calculated as follows:

Group Fee Rate Individual Fund Fee Rate Management Fee Rate

Massachusetts Municipal Money 0.___% + 0.25% = 0.___%
Market

Group Fee Rate Individual Fund Fee Rate Management Fee Rate

Spartan Massachusetts 0.___% + 0.25% = 0.___%
Municipal Income

</TABLE>

One-twelfth of the management fee rate is applied to each fund's
average net assets for the month, giving a dollar amount which is the
fee for that month.

The following table shows the amount of management fees paid by each
fund to FMR for the past three fiscal years, and the amount of credits
reducing management fees for Spartan Massachusetts Municipal Money
Market.

Fund Fiscal Years Ended January 31 Amount of Credits Reducing Management Fees Paid to FMR
Management Fees

Massachusetts Municipal Money 2000 $ $
Market

1999 $ $

1998 $ $

Spartan Massachusetts 2000 $ $ *
Municipal Money Market

1999 $ $ *

1998 $ $ *

Spartan Massachusetts 2000 $ $
Municipal Income

1999 $ $

1998 $ $

</TABLE>

* After reduction of fees and expenses paid by the fund to the
non-interested Trustees.

FMR may, from time to time, voluntarily reimburse all or a portion of
a fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses), which is subject to revision
or discontinuance. FMR retains the ability to be repaid for these
expense reimbursements in the amount that expenses fall below the
limit prior to the end of the fiscal year.

Expense reimbursements by FMR will increase a fund's returns and
yield, and repayment of the reimbursement by a fund will lower its
returns and yield.

FMR voluntarily agreed to reimburse Spartan Massachusetts Municipal
Income if and to the extent that the fund's aggregate operating
expenses, including management fees, were in excess of an annual rate
of its average net assets. The table below shows the periods of
reimbursement and levels of expense limitations; the dollar amount of
management fees incurred under the fund's contract before
reimbursement; and the dollar amount of management fees reimbursed by
FMR under the expense reimbursement for each period.

Period[s] of Expense Limitation Aggregate Operating Expense Fiscal Years Ended January 31
From To Limitation

Spartan Massachusetts April 1, 1997 Present 0.55% 1999
Municipal Income

</TABLE>

Management Fee Before Amount of Management Fee
Reimbursement Reimbursement

Spartan Massachusetts $ [*] $
Municipal Income

</TABLE>

SUB-ADVISER. FMR has entered into a sub-advisory agreement with FIMM
pursuant to which FIMM has primary responsibility for choosing
investments for each fund. Prior to January 23, 1998, FMR Texas
Inc. (FMR Texas) had primary responsibility for providing investment
management services to each money market fund. On
January 23, 1998, FMR Texas was merged into FIMM, which succeeded to
the operations of FMR Texas.

Under the terms of the sub-advisory agreements, FMR pays FIMM
fees equal to 50% of the management fee payable to FMR under its
management contract with each fund. The fees paid to FIMM are not
reduced by any voluntary or mandatory expense reimbursements that may
be in effect from time to time.

Fees paid to FMR Texas and FIMM by FMR on behalf o f the money
market funds for the past three fiscal years are shown in the
table below.

Fund Fiscal Year Ended January 31 Fees Paid to FMR Texas Fees Paid to FIMM

Massachusetts Municipal Money 2000 $ $
Market

1999 $ $

1998 $ $

Spartan Massachusetts 2000 $ $
Municipal Money Market

1999 $ $

1998 $ $

</TABLE>

On behalf of Spartan Massachusetts Municipal Income, for the fiscal
years ended January 31, 2000, 1999, and 1998, FMR paid FIMM fees of
$ ______, $______ , and $_____, r espectively.

DISTRIBUTION SERVICES

Each fund has entered into a distribution agreement with FDC, an
affiliate of FMR. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. The distribution agreements
call for FDC to use all reasonable efforts, consistent with its other
business, to secure purchasers for shares of the fund, which are
continuously offered at NAV. Promotional and administrative expenses
in connection with the offer and sale of shares are paid by FMR.

The Trustees have approved Distribution and Service Plans on behalf of
each fund (the Plans) pursuant to Rule 12b-1 under the 1940 Act (the
Rule). The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of the fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plans, as approved by the Trustees, allow the funds and FMR to incur
certain expenses that might be considered to constitute indirect
payment by the funds of distribution expenses.

Under each Plan, if the payment of management fees by the fund to FMR
is deemed to be indirect financing by the fund of the distribution of
its shares, such payment is authorized by the Plan. Each Plan
specifically recognizes that FMR may use its management fee revenue,
as well as its past profits or its other resources, to pay FDC for
expenses incurred in connection with providing services intended to
result in the sale of fund shares and/or shareholder support services.
In addition, each Plan provides that FMR, directly or through FDC, may
pay intermediaries, such as banks, broker-dealers and other
service-providers, that provide those services. Currently, the Board
of Trustees has authorized such payments for Massachusetts Municipal
Money Market , Spartan Massachusetts Municipal Money
Market, and Spartan Massachusetts Municipal Income shares.

Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will
benefit the fund and its shareholders. In particular, the Trustees
noted that each Plan does not authorize payments by the fund other
than those made to FMR under its management contract with the fund. To
the extent that each Plan gives FMR and FDC greater flexibility in
connection with the distribution of fund shares, additional sales of
fund shares or stabilization of cash flows may result. Furthermore,
certain shareholder support services may be provided more effectively
under the Plans by local entities with whom shareholders have other
relationships.

The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope
of this prohibition under the Glass-Steagall Act has not been clearly
defined by the courts or appropriate regulatory agencies, FDC believes
that the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks and their affiliates
or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions,
if any, would be necessary to continue to provide efficient and
effective shareholder services. In such event, changes in the
operation of the funds might occur, including possible termination of
any automatic investment or redemption or other services then provided
by the bank. It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these
occurrences. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein, and
banks and other financial institutions may be required to register as
dealers pursuant to state law.

Each fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plans. No preference for the instruments of such depository
institutions will be shown in the selection of investments.

FDC may compensate intermediaries that satisfy certain criteria
established from time to time by FDC relating to the level or type of
services provided by the intermediary, the sale or expected sale of
significant amounts of shares, or other factors.

TRANSFER AND SERVICE AGENT AGREEMENTS

Each fund has entered into a transfer agent agreement with
Citibank, N.A. (Citibank), which is located at 111 Wall Street, New
York, New York. Under the terms of the agreements, Citibank
provides transfer agency, dividend disbursing, and shareholder
services for each fund. Citibank in turn has entered into
sub-transfer agent agreements with FSC, an affiliate of FMR. Under the
terms of the sub-agreements, FSC performs all processing activities
associated with providing these services for each fund and receives
all related transfer agency fees paid to Citibank.

For providing transfer agency services, FSC receives an account fee
and an asset-based fee each paid monthly with respect to each account
in a fund. For retail accounts and certain institutional accounts,
these fees are based on account size and fund type. For certain
institutional retirement accounts, these fees are based on fund type.
For certain other institutional retirement accounts, these fees are
based on account type and fund type. The account fees are subject to
increase based on postage rate changes.

FSC also collects small account fees from certain accounts with
balances of less than $2,500.

In addition, FSC collects a $5.00 exchange fee for each exchange out
of Spartan Massachusetts Municipal Money Market.

FSC also collects Spartan Massachusetts Municipal Money Market's $5.00
wire transaction fee.

FSC also collects Spartan Massachusetts Municipal Money Market's $5.00
account closeout fee.

FSC also collects Spartan Massachusetts Municipal Money Market's $2.00
checkwriting fee.

In addition, Citibank receives the pro rata portion of the
transfer agency fees applicable to shareholder accounts in a qualified
state tuition program (QSTP), as defined under the Small Business Job
Protection Act of 1996, managed by FMR or an affiliate and in each
Fidelity Freedom Fund and Fidelity Four-in-One Index Fund, funds of
funds managed by an FMR affiliate, according to the percentage of the
QSTP's, Freedom Fund's or Fidelity Four-in-One Index Fund's assets
that is invested in a fund, subject to certain limitations in the case
of Fidelity Four-in-One Index Fund.

FSC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FSC bears the expense of typesetting,
printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
existing shareholders, with the exception of proxy statements.

Each fund has also entered into a service agent agreement with
Citibank . Under the terms of the agreements, Citibank provides
pricing and bookkeeping services for each fund. Citibank in
turn has entered into sub-service agent agreements with FSC. Under the
terms of the sub-agreements, FSC performs all processing activities
associated with providing these services, including calculating the
NAV and dividends for each fund and maintaining each fund's portfolio
and general accounting records, and receives all related pricing and
bookkeeping fees paid to Citibank.

For providing pricing and bookkeeping services, FSC receives a monthly
fee based on each fund's average daily net assets throughout the
month.

The annual rates for pricing and bookkeeping services for domestic
fixed-income funds are 0.0275% of the first $500 million of average
net assets, 0.0175% of average net assets between $500 million and $3
billion, and 0.0010% of average net assets in excess of $3 billion.
The fee, not including reimbursement for out-of-pocket expenses, is
limited to a minimum of $60,000 per year.

The annual rates for pricing and bookkeeping services for money market
funds are 0.0150% of the first $500 million of average net assets,
0.0075% of average net assets between $500 million and $10 billion,
and 0.0010% of average net assets in excess of $10 billion. The fee,
not including reimbursement for out-of-pocket expenses, is limited to
a minimum of $40,000 per year.

Pricing and bookkeeping fees, including reimbursement for
out-of-pocket expenses, paid by Massachusetts Municipal Money Market
and Spartan Massachusetts Municipal Income to FSC for the past three
fiscal years are shown in the table below.

Fund 2000 1999 1998

Massachusetts Municipal Money $ $ $
Market

Spartan Massachusetts $ $ $
Municipal Income

For Spartan Massachusetts Municipal Money Market, FMR bears the cost
of transfer agency, dividend disbursing, and shareholder services and
pricing and bookkeeping services under the terms of its management
contract with the fund.

DESCRIPTION OF THE TRUST

TRUST ORGANIZATION. Spartan Massachusetts Municipal Money Market,
Fidelity Massachusetts Municipal Money Market and Spartan
Massachusetts Municipal Income are funds of Fidelity Massachusetts
Municipal Trust, an open-end management investment company organized
as a Massachusetts business trust on December 14, 1981. Currently,
there are three funds in Fidelity Massachusetts Municipal Trust. The
Trustees are permitted to create additional funds in the trust.

The assets of the trust received for the issue or sale of shares of
each fund and all income, earnings, profits, and proceeds thereof,
subject to the rights of creditors, are allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets
of each fund in the trust shall be charged with the liabilities and
expenses attributable to such fund. Any general expenses of the trust
shall be allocated between or among any one or more of the funds.

SHAREHOLDER LIABILITY. The trust is an entity commonly known as a
"Massachusetts business trust." Under Massachusetts law, shareholders
of such a trust may, under certain circumstances, be held personally
liable for the obligations of the trust.

T he Declaration of Trust contains an express disclaimer of
shareholder liability for the debts, liabilities, obligations, and
expenses of the trust or fund. The Declaration of Trust provides
that the trust shall not have any claim against shareholders except
for the payment of the purchase price of shares and requires that each
agreement, obligation, or instrument entered into or executed by the
trust or the Trustees relating to the trust or to a fund shall include
a provision limiting the obligations created thereby to the trust or
to one or more funds and its or their assets. The Declaration of
Trust further provides that shareholders of a fund shall not have a
claim on or right to any assets belonging to any other fund.

The Declaration of Trust provides for indemnification out of each
fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund solely by reason of
his or her being or having been a shareholder and not because of his
or her acts or omissions or for some other reason. The Declaration of
Trust also provides that each fund shall, upon request, assume the
defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the
risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which a fund
itself would be unable to meet its obligations. FMR believes that, in
view of the above, the risk of personal liability to shareholders is
remote.

VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you are entitled to one vote for each
dollar of net asset value that you own. The voting rights of
shareholders can be changed only by a shareholder vote. Shares may be
voted in the aggregate, by fund and by class.

The shares have no preemptive or conversion rights. Shares are fully
paid and nonassessable, except as set forth under the heading
"Shareholder Liability" above.

The trust or any of its funds may be terminated upon the sale of
its assets to, or merger with, another open-end management investment
company or series thereof, or upon liquidation and distribution of its
assets. Generally, the merger of the trust or a fund with another
entity or the sale of substantially all of the assets of the trust or
a fund to another entity requires approval by a vote of shareholders
of the trust or the fund. The Trustees may, however, reorganize or
terminate the trust or any of its funds without prior shareholder
approval. In the event of the dissolution or liquidation of the trust,
shareholders of each of its funds are entitled to receive the
underlying assets of such fund available for distribution. In the
event of the dissolution or liquidation of a fund, shareholders of
that fund are entitled to receive the underlying assets of the fund
available for distribution.

CUSTODIAN. Citibank, N.A., 111 Wall Street, New York, New York ,
is custodian of the assets of the funds. The custodian is responsible
for the safekeeping of a fund's assets and the appointment of any
subcustodian banks and clearing agencies.

FMR, its officers and directors, its affiliated companies, and members
of the Board of Trustees may, from time to time, conduct transactions
with various banks, including banks serving as custodians for certain
funds advised by FMR. Transactions that have occurred to date include
mortgages and personal and general business loans. In the judgment of
FMR, the terms and conditions of those transactions were not
influenced by existing or potential custodial or other fund
relationships.

AUDITOR. __ , serves as independent accountant for each fund.
The auditor examines financial statements for the funds and provides
other audit, tax, and related services.

FINANCIAL STATEMENTS

Each fund's financial statements and financial highlights for the
fiscal year ended January 31, 2000 , and report of the auditor, are
included in the fund's annual report and are incorporated herein by
reference.

APPENDIX

Spartan, Fidelity, Fidelity Investments & (Pyramid) Design, Fidelity
Focus, Fidelity Investments and Magellan are registered trademarks of
FMR Corp.

Portfolio Advisory Services is a service mark of FMR Corp.

THE THIRD PARTY MARKS APPEARING ABOVE ARE THE MARKS OF THEIR
RESPECTIVE OWNERS.

PART C. OTHER INFORMATION

Item 23. Exhibits:

(a) Amended and Restated Declaration of Trust, dated March 17,
1994, is incorporated herein by reference to Exhibit 1 of
Post-Effective Amendment No. 29.

(b) Bylaws of the Trust, as amended and dated May 19, 1994, are
incorporated herein by reference to Exhibit 2(a) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.

(d) (1) Management Contract, dated February 1, 1994, between
Fidelity Massachusetts Tax-Free Money Market Portfolio
(currently Fidelity Massachusetts Municipal Money Market
Fund) and Fidelity Management & Research Company, is
incorporated herein by reference to Exhibit 5(a) of
Post-Effective Amendment No. 26.

(2) Management Contract, dated February 1, 1994, between
Fidelity Massachusetts Tax-Free High Yield Portfolio
(currently Spartan Massachusetts Municipal Income Fund) and
Fidelity Management & Research Company, is incorporated
herein by reference to Exhibit 5(b) of Post-Effective
Amendment No. 26.

(3) Management Contract, dated February 14, 1991, between
Spartan Massachusetts Municipal Money Market Portfolio
(currently Spartan Massachusetts Municipal Money Market
Fund) and Fidelity Management & Research Company, is
incorporated herein by reference to Exhibit 5(c) of
Post-Effective No. 29.

(4) Sub-Advisory Agreement, dated August 1, 1989, between FMR
Texas Inc. and FMR on behalf of Fidelity Massachusetts
Tax-Free Money Market Portfolio (currently Fidelity
Massachusetts Municipal Money Market Fund), is incorporated
herein by reference to Exhibit 5(d) of Post-Effective
Amendment No. 29.

(5) Sub-Advisory Agreement dated, February 14, 1991, between FMR
Texas Inc. and FMR on behalf of Spartan Massachusetts
Municipal Money Market Portfolio (currently Spartan
Massachusetts Municipal Money Market Fund), is incorporated
herein by reference to Exhibit 5(e) of Post-Effective
Amendment No. 29.

(6) Sub-Advisory Agreement dated, January 1, 1999, between
Fidelity Investments Money Management, Inc. and FMR on
behalf of Spartan Massachusetts Municipal Income Fund, is
incorporated herein by reference to Exhibit (d)(6) of Post
Effective Amendment No. 36.

(e) (1) General Distribution Agreement, dated April 1, 1987, between
Fidelity Massachusetts Tax-Free Money Market Portfolio
(currently Fidelity Massachusetts Municipal Money Market
Fund) and Fidelity Distributors Corporation, is incorporated
herein by reference to Exhibit 6(a) of Post-Effective
Amendment No. 29.

(2) General Distribution Agreement, dated April 1, 1987, between
Fidelity Massachusetts Tax-Free High Yield Portfolio
(currently Spartan Massachusetts Municipal Income Fund) and
Fidelity Distributors Corporation, is incorporated herein by
reference to Exhibit 6(b) of Post-Effective Amendment No.
29.

(3) Amendment to the General Distribution Agreement, dated
January 1, 1988, between Fidelity Massachusetts Tax-Free
Money Market Portfolio (currently Fidelity Massachusetts
Municipal Money Market Fund) and Fidelity Distributors
Corporation, is incorporated herein by reference to Exhibit
6(c) of Post-Effective Amendment No. 29.

(4) Amendment to the General Distribution Agreement, dated
January 1, 1988, between Fidelity Massachusetts Tax-Free
High Yield Portfolio (currently Spartan Massachusetts
Municipal Income Fund) and Fidelity Distributors
Corporation, is incorporated herein by reference to Exhibit
6(d) of Post-Effective Amendment No. 29.

(5) General Distribution Agreement, dated February 14, 1991,
between Spartan Massachusetts Municipal Money Market
Portfolio (currently Spartan Massachusetts Municipal Money
Market Fund), and Fidelity Distributors Corporation is
incorporated herein by reference to Exhibit 6(e) of
Post-Effective Amendment No. 29.

(6) Amendment to the General Distribution Agreement, dated May
10, 1994, between Spartan Massachusetts Municipal Money
Market Portfolio (currently Spartan Massachusetts Municipal
Money Market Fund) and Fidelity Distributors Corporation, is
incorporated herein by reference to Exhibit 6(f) of
Post-Effective Amendment No. 29.

(7) Amendments to the General Distribution Agreement between the
Registrant and Fidelity Distributors Corporation, dated
March 14, 1996 and July 15, 1996, are incorporated herein by
reference to Exhibit 6(a) of Fidelity Court Street Trust's
Post-Effective Amendment No. 61 (File No. 2-58774).

(f) (1) The Fee Deferral Plan for Non-Interested Person Directors
and Trustees of the Fidelity Funds, effective as of
September 14, 1995 and amended through November 14, 1996, is
incorporated herein by reference to Exhibit 7(b) of Fidelity
Aberdeen Street Trust's (File No. 33-43529) Post-Effective
Amendment No. 19.

(g) (1) Custodian Agreement, Appendix A, Appendix B, and Appendix C,
dated May 1, 1998, between Citibank, N.A. and Fidelity
Massachusetts Municipal Trust on behalf of Fidelity
Massachusetts Municipal Money Market Fund, Spartan
Massachusetts Municipal Money Market Fund, and Spartan
Massachusetts Municipal Income Fund are incorporated herein
by reference to Exhibit g(5) of Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 102.

(h) Not applicable.

(i) Not applicable.

(j) Not applicable.

(k) Not applicable.

(l) Not applicable.

(m) (1) Distribution and Service Plan of Fidelity Massachusetts
Municipal Money Market Fund is incorporated herein by
reference to Exhibit 15(a) of Post-Effective Amendment No.
34.

(2) Distribution and Service Plan of Spartan Massachusetts
Municipal Income Fund is incorporated herein by reference to
Exhibit 15(b) of Post-Effective Amendment No. 34.

(3) Distribution and Service Plan for Spartan Massachusetts
Municipal Money Market Fund is incorporated herein by
reference to Exhibit 15(c) of Post-Effective Amendment No.
34.

(n) Not applicable.

(o) Not Applicable.

Item 24. Persons Controlled by or under Common Control with
Registrant

The Board of Trustees of the Trust is the same as the board of other
Fidelity funds, each of which has Fidelity Management & Research
Company, or an affiliate, as its investment adviser. In addition, the
officers of the Trust are substantially identical to those of the
other Fidelity funds. Nonetheless, the Trust takes the position that
it is not under common control with other Fidelity funds because the
power residing in the respective boards and officers arises as the
result of an official position with the respective trusts.

Item 25. Indemnification

Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification
shall be provided to any past or present Trustee or officer. It states
that the Trust shall indemnify any present or past trustee or officer
to the fullest extent permitted by law against liability, and all
expenses reasonably incurred by him or her in connection with any
claim, action, suit or proceeding in which he or she is involved by
virtue of his or her service as a trustee or officer and against any
amount incurred in settlement thereof. Indemnification will not be
provided to a person adjudged by a court or other adjudicatory body to
be liable to the Trust or its shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of his
or her duties (collectively, "disabling conduct"), or not to have
acted in good faith in the reasonable belief that his or her action
was in the best interest of the Trust. In the event of a settlement,
no indemnification may be provided unless there has been a
determination, as specified in the Declaration of Trust, that the
officer or trustee did not engage in disabling conduct.

Pursuant to Section 11 of the Distribution Agreement, the Trust
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss,
liability, claim, damages, or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information,
shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a
material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading
under the 1933 Act, or any other statute or the common law. However,
the Trust does not agree to indemnify the Distributor or hold it
harmless to the extent that the statement or omission was made in
reliance upon, and in conformity with, information furnished to the
Trust by or on behalf of the Distributor. In no case is the indemnity
of the Trust in favor of the Distributor or any person indemnified to
be deemed to protect the Distributor or any person against any
liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.

Pursuant to the agreement by which Fidelity Service Company, Inc.
("FSC") is appointed sub-transfer agent, the Transfer Agent agrees to
indemnify FSC for FSC's losses, claims, damages, liabilities and
expenses (including reasonable counsel fees and expenses) (losses) to
the extent that the Transfer Agent is entitled to and receives
indemnification from the Fund for the same events. Under the Transfer
Agency Agreement, the Trust agrees to indemnify and hold the Transfer
Agent harmless against any losses, claims, damages, liabilities, or
expenses (including reasonable counsel fees and expenses) resulting
from:

(1) any claim, demand, action or suit brought by any person other
than the Trust, including by a shareholder, which names the Transfer
Agent and/or the Trust as a party and is not based on and does not
result from the Transfer Agent's willful misfeasance, bad faith or
negligence or reckless disregard of duties, and arises out of or in
connection with the Transfer Agent's performance under the Transfer
Agency Agreement; or

(2) any claim, demand, action or suit (except to the extent
contributed to by the Transfer Agent's willful misfeasance, bad faith
or negligence or reckless disregard of its duties) which results from
the negligence of the Trust, or from the Transfer Agent's acting upon
any instruction(s) reasonably believed by it to have been executed or
communicated by any person duly authorized by the Trust, or as a
result of the Transfer Agent's acting in reliance upon advice
reasonably believed by the Transfer Agent to have been given by
counsel for the Trust, or as a result of the Transfer Agent's acting
in reliance upon any instrument or stock certificate reasonably
believed by it to have been genuine and signed, countersigned or
executed by the proper person.

Item 26. Business and Other Connections of Investment Advisers

(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
82 Devonshire Street, Boston, MA 02109

FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held,
during the past two fiscal years, the following positions of a
substantial nature.

Edward C. Johnson 3d Chairman of the Board and
Director of FMR; President
and Chief Executive Officer
of FMR Corp.; Chairman of
the Board and Director of
FMR Corp., Fidelity
Investments Money
Management, Inc. (FIMM),
Fidelity Management &
Research (U.K.) Inc. (FMR
U.K.), and Fidelity
Management & Research (Far
East) Inc. (FMR Far East);
Chairman of the Executive
Committee of FMR; Chairman
and Representative Director
of Fidelity Investments
Japan Limited (FIJ);
President and Trustee of
funds advised by FMR.

Robert C. Pozen President and Director of
FMR; Senior Vice President
and Trustee of funds advised
by FMR; President and
Director of FIMM, FMR U.K.,
and FMR Far East; Director
of Strategic Advisers, Inc.;
Previously, General Counsel,
Managing Director, and
Senior Vice President of FMR
Corp.

Peter S. Lynch Vice Chairman of the Board
and Director of FMR.

John Avery Vice President of FMR.

Robert Bertelson Vice President of FMR.

John H. Carlson Vice President of FMR and of
funds advised by FMR.

Robert C. Chow Vice President of FMR.

Dwight D. Churchill Senior Vice President of FMR
and Vice President of Bond
Funds advised by FMR; Vice
President of FIMM.

Laura B. Cronin Vice President of FMR and
Treasurer of FMR, FIMM, FMR
U.K., and FMR Far East.

Barry Coffman Vice President of FMR.

Arieh Coll Vice President of FMR.

Catherine Collins Vice President of FMR.

Frederic G. Corneel Tax Counsel of FMR.

William Danoff Senior Vice President of FMR
and Vice President of funds
advised by FMR.

Scott E. DeSano Vice President of FMR.

Penelope Dobkin Vice President of FMR and of
a fund advised by FMR.

Walter C. Donovan Vice President of FMR.

Bettina Doulton Senior Vice President of FMR
and of funds advised by FMR.

Stephen DuFour Vice President of FMR.

Maria F. Dwyer Vice President of FMR and
Deputy Treasurer of the
Fidelity funds.

Margaret L. Eagle Vice President of FMR and of
a fund advised by FMR.

William R. Ebsworth Vice President of FMR.

David Felman Vice President of FMR.

Richard B. Fentin Senior Vice President of FMR
and Vice President of a fund
advised by FMR.

Karen Firestone Vice President of FMR.

Michael B. Fox Assistant Treasurer of FMR,
FIMM, FMR U.K., and FMR Far
East; Vice President and
Treasurer of FMR Corp. and
Strategic Advisers, Inc.;
Vice President of FMR U.K.,
FMR Far East, and FIMM.

Gregory Fraser Vice President of FMR and of
a fund advised by FMR.

Jay Freedman Assistant Clerk of FMR; Clerk
of FMR Corp., FMR U.K., FMR
Far East, and Strategic
Advisers, Inc.; Secretary of
FIMM; Vice President Deputy
General Counsel FMR Corp.

David L. Glancy Vice President of FMR and of
a fund advised by FMR.

Barry A. Greenfield Vice President of FMR.

Boyce I. Greer Senior Vice President of FMR
and Vice President of Money
Market Funds advised by FMR;
Vice President of FIMM.

Bart A. Grenier Senior Vice President of FMR
and Vice President of
High-Income Funds advised by
FMR.

Robert J. Haber Vice President of FMR.

Richard C. Habermann Senior Vice President of FMR
and Vice President of funds
advised by FMR.

Fred L. Henning Jr. Senior Vice President of FMR;
Senior Vice President of
FIMM; Vice President of
Fixed-Income Funds advised
by FMR.

Bruce T. Herring Vice President of FMR.

Robert F. Hill Vice President of FMR and
Director of Technical
Research.

Frederick Hoff Vice President of FMR.

Abigail P. Johnson Senior Vice President of FMR
and Vice President of funds
advised by FMR; Director of
FMR Corp.; Associate
Director and Senior Vice
President of Equity Funds
advised by FMR.

David B. Jones Vice President of FMR.

Steven Kaye Senior Vice President of FMR
and of a fund advised by FMR.

Francis V. Knox Vice President of FMR;
Compliance Officer of FMR
U.K. and FMR Far East.

Harris Leviton Vice President of FMR.

Bradford E. Lewis Vice President of FMR and of
funds advised by FMR.

Richard R. Mace Jr. Vice President of FMR and of
funds advised by FMR.

Shigeki Makino Vice President of FMR.

Charles A. Mangum Vice President of FMR and of
a fund advised by FMR.

Kevin McCarey Vice President of FMR and of
a fund advised by FMR.

James McDowell Senior Vice President of FMR.

Neal P. Miller Vice President of FMR.

Jacques Perold Vice President of FMR.

Stephen Petersen Senior Vice President of FMR.

Alan Radlo Vice President of FMR.

Eric D. Roiter Vice President, General
Counsel, and Clerk of FMR
and Secretary of funds
advised by FMR.

Lee H. Sandwen Vice President of FMR.

Patricia A. Satterthwaite Vice President of FMR and of
a fund advised by FMR.

Fergus Shiel Vice President of FMR.

Richard A. Silver Vice President of FMR.

Carol A. Smith-Fachetti Vice President of FMR.

Steven J. Snider Vice President of FMR and of
funds advised by FMR.

Thomas T. Soviero Vice President of FMR and of
a fund advised by FMR.

Richard Spillane Senior Vice President of FMR;
Associate Director and
Senior Vice President of
Equity Funds advised by FMR;
Previously, Senior Vice
President and Director of
Operations and Compliance of
FMR U.K.

Thomas M. Sprague Vice President of FMR and of
a fund advised by FMR.

Robert E. Stansky Senior Vice President of FMR
and Vice President of a fund
advised by FMR.

Scott D. Stewart Vice President of FMR.

Beth F. Terrana Senior Vice President of FMR
and Vice President of funds
advised by FMR.

Yoko Tilley Vice President of FMR.

Joel C. Tillinghast Vice President of FMR and of
a fund advised by FMR.

Robert Tuckett Vice President of FMR.

Jennifer Uhrig Vice President of FMR and of
funds advised by FMR.

George A. Vanderheiden Senior Vice President of FMR
and Vice President of funds
advised by FMR; Director of
FMR Corp.

Jason Weiner Vice President of FMR.

Steven S. Wymer Vice President of FMR and of
a fund advised by FMR.

(4) FIDELITY INVESTMENTS MONEY MANAGEMENT, INC. (FIMM)
1 Spartan Way, Merrimack, NH 03054

FIMM provides investment advisory services to Fidelity Management &
Research Company. The directors and officers of the Sub-Adviser have
held the following positions of a substantial nature during the past
two fiscal years.

Edward C. Johnson 3d Chairman of the Board and
Director of FIMM, FMR, FMR
Corp., FMR Far East, and FMR
U.K.; Chairman of the
Executive Committee of FMR;
President and Chief
Executive Officer of FMR
Corp.; Chairman and
Representative Director of
Fidelity Investments Japan
Limited (FIJ); President and
Trustee of funds advised by
FMR.

Robert C. Pozen President and Director of
FIMM; Senior Vice President
and Trustee of funds advised
by FMR; President and
Director of FMR, FMR U.K.,
and FMR Far East; Director
of Strategic Advisers, Inc.;
Previously, General Counsel,
Managing Director, and
Senior Vice President of FMR
Corp.

Fred L. Henning Jr. Senior Vice President of
FIMM; Senior Vice President
of FMR and Vice President of
Fixed-Income Funds advised
by FMR.

Boyce I. Greer Vice President of FIMM;
Senior Vice President of FMR
and Vice President of Money
Market Funds advised by FMR.

Dwight D. Churchill Vice President of FIMM;
Senior Vice President of FMR
and Vice President of Bond
Funds advised by FMR.

Laura B. Cronin Treasurer of FIMM, FMR Far
East, FMR U.K., and FMR and
Vice President of FMR.

Michael B. Fox Assistant Treasurer of FIMM,
FMR U.K., FMR Far East, and
FMR; Vice President and
Treasurer of FMR Corp. and
Strategic Advisers, Inc.;
Vice President of FIMM, FMR
U.K., and FMR Far East.

Jay Freedman Secretary of FIMM; Clerk of
FMR U.K., FMR Far East, FMR
Corp., and Strategic
Advisers, Inc.; Assistant
Clerk of FMR; Vice President
Deputy General Counsel FMR
Corp.

Susan Englander Hislop Assistant Secretary of FIMM;
Assistant Clerk of FMR U.K.,
FMR Far East, and Strategic
Advisers, Inc.

Stanley N. Griffith Assistant Secretary of FIMM.

Item 27. Principal Underwriters

(a) Fidelity Distributors Corporation (FDC) acts as distributor for
all funds advised by FMR or an affiliate.

(b)

Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Fund

Edward C. Johnson 3d Director Trustee and President

Michael Mlinac Director None

James Curvey Director None

Martha B. Willis President None

Eric D. Roiter Vice President Secretary

Caron Ketchum Treasurer and Controller None

Gary Greenstein Assistant Treasurer None

Jay Freedman Assistant Clerk None

Linda Holland Compliance Officer None

* 82 Devonshire Street, Boston, MA

Item 28. Location of Accounts and Records

All accounts, books, and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company, Fidelity Service
Company, Inc. or Fidelity Investments Institutional Operations
Company, Inc., 82 Devonshire Street, Boston, MA 02109, or the funds'
custodian, Citibank, N.A., 111 Wall Street, New York, NY.

Item 29. Management Services

Not applicable.

Item 30. Undertakings

The Registrant, on behalf of Spartan Massachusetts Municipal Money
Market Fund and Fidelity Massachusetts Municipal Money Market Fund
provided the information required by Item 5A is contained in the
annual report, undertakes to furnish each person to whom a prospectus
has been delivered, upon their request and without charge, a copy of
the Registrant's latest annual report to shareholders.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 38 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Boston, and Commonwealth of Massachusetts, on the 12th day
of January 2000.

Fidelity Massachusetts Municipal Trust
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
<S> <C> <C>
(Signature) (Title) (Date)

/s/Edward C. Johnson 3d President and Trustee January 12, 2000
(dagger)

Edward C. Johnson 3d (Principal Executive Officer)

/s/Richard A. Silver Treasurer January 12, 2000

Richard A. Silver

/s/Robert C. Pozen Trustee January 12, 2000

Robert C. Pozen

/s/Ralph F. Cox Trustee January 12, 2000
*

Ralph F. Cox

/s/Phyllis Burke Davis Trustee January 12, 2000
*

Phyllis Burke Davis

/s/Robert M. Gates Trustee January 12, 2000
*

Robert M. Gates

/s/Donald J. Kirk Trustee January 12, 2000
*

Donald J. Kirk

/s/Ned C. Lautenbach Trustee January 12, 2000
*

Ned C. Lautenbach

/s/Peter S. Lynch Trustee January 12, 2000
*

Peter S. Lynch

/s/Marvin L. Mann Trustee January 12, 2000
*

Marvin L. Mann

/s/William O. McCoy Trustee January 12, 2000
*

William O. McCoy

/s/Gerald C. McDonough Trustee January 12, 2000
*

Gerald C. McDonough

/s/Thomas R. Williams Trustee January 12, 2000
*

Thomas R. Williams

</TABLE>

(dagger) Signatures affixed by Robert C. Pozen pursuant to a power of
attorney dated July 17, 1997 and filed herewith.

* Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated December 16, 1999 and filed herewith.

POWER OF ATTORNEY

We, the undersigned Directors, Trustees, or General Partners, as the
case may be, of the following investment companies:

Colchester Street Trust Fidelity Hastings Street Trust
Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional
Fidelity Advisor Series III Tax-Exempt Cash Portfolios
Fidelity Advisor Series IV Fidelity Investment Trust
Fidelity Advisor Series V Fidelity Magellan Fund
Fidelity Advisor Series VI Fidelity Massachusetts
Fidelity Advisor Series VII Municipal Trust
Fidelity Advisor Series VIII Fidelity Money Market Trust
Fidelity Beacon Street Trust Fidelity Mt. Vernon Street
Fidelity Boston Street Trust Trust
Fidelity California Municipal Fidelity Municipal Trust
Trust Fidelity Municipal Trust II
Fidelity California Municipal Fidelity New York Municipal
Trust II Trust
Fidelity Capital Trust Fidelity New York Municipal
Fidelity Charles Street Trust Trust II
Fidelity Commonwealth Trust Fidelity Oxford Street Trust
Fidelity Concord Street Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Court Street Trust Fidelity School Street Trust
Fidelity Court Street Trust II Fidelity Securities Fund
Fidelity Covington Trust Fidelity Select Portfolios
Fidelity Destiny Portfolios Fidelity Summer Street Trust
Fidelity Devonshire Trust Fidelity Trend Fund
Fidelity Exchange Fund Fidelity U.S.
Fidelity Financial Trust Investments-Bond Fund, L.P.
Fidelity Fixed-Income Trust Fidelity U.S.
Fidelity Government Investments-Government
Securities Fund Securities
Fund, L.P.
Fidelity Union Street Trust
Fidelity Union Street Trust II
Newbury Street Trust
Variable Insurance Products
Fund
Variable Insurance Products
Fund II

plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Directors, Trustees, or
General Partners (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, our true and lawful attorneys-in-fact,
with full power of substitution, and with full power to each of them,
to sign for us and in our names in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in our names
and behalf in connection therewith as said attorneys-in-fact deems
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after January
1, 2000.

WITNESS our hands on this sixteenth day of December, 1999.

/s/Edward C. Johnson 3d /s/Peter S. Lynch

Edward C. Johnson 3d Peter S. Lynch

/s/Ralph F. Cox /s/William O. McCoy

Ralph F. Cox William O. McCoy

/s/Phyllis Burke Davis /s/Gerald C. McDonough

Phyllis Burke Davis Gerald C. McDonough

/s/Ned C. Lautenbach /s/Marvin L. Mann

Ned C. Lautenbach Marvin L. Mann

/s/Donald J. Kirk /s/Thomas R. Williams

Donald J. Kirk Thomas R. Williams

/s/Robert C. Pozen /s/Robert M. Gates

Robert C. Pozen Robert M. Gates

POWER OF ATTORNEY

I, the undersigned President and Director, Trustee, or General
Partner, as the case may be, of the following investment companies:

Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional Cash
Fidelity Advisor Series III Portfolios
Fidelity Advisor Series IV Fidelity Institutional
Fidelity Advisor Series V Tax-Exempt Cash Portfolios
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts
Fidelity Beacon Street Trust Municipal Trust
Fidelity Boston Street Trust Fidelity Money Market Trust
Fidelity California Municipal Fidelity Mt. Vernon Street
Trust Trust
Fidelity California Municipal Fidelity Municipal Trust
Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal
Fidelity Charles Street Trust Trust
Fidelity Commonwealth Trust Fidelity New York Municipal
Fidelity Concord Street Trust Trust II
Fidelity Congress Street Fund Fidelity Phillips Street Trust
Fidelity Contrafund Fidelity Puritan Trust
Fidelity Corporate Trust Fidelity Revere Street Trust
Fidelity Court Street Trust Fidelity School Street Trust
Fidelity Court Street Trust II Fidelity Securities Fund
Fidelity Covington Trust Fidelity Select Portfolios
Fidelity Daily Money Fund Fidelity Sterling Performance
Fidelity Destiny Portfolios Portfolio, L.P.
Fidelity Deutsche Mark Fidelity Summer Street Trust
Performance Fidelity Trend Fund
Portfolio, L.P. Fidelity U.S.
Fidelity Devonshire Trust Investments-Bond Fund, L.P.
Fidelity Exchange Fund Fidelity U.S.
Fidelity Financial Trust Investments-Government
Fidelity Fixed-Income Trust Securities
Fidelity Government Fund, L.P.
Securities Fund Fidelity Union Street Trust
Fidelity Hastings Street Trust Fidelity Union Street Trust II
Fidelity Yen Performance
Portfolio, L.P.
Newbury Street Trust
Variable Insurance Products
Fund
Variable Insurance Products
Fund II
Variable Insurance Products
Fund III

in addition to any other investment company for which Fidelity
Management & Research Company or an affiliate acts as investment
adviser and for which the undersigned individual serves as President
and Director, Trustee, or General Partner (collectively, the "Funds"),
hereby constitute and appoint Robert C. Pozen my true and lawful
attorney-in-fact, with full power of substitution, and with full power
to him to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A, or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A, Form N-8A, or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such
things in my name and on my behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company
Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorney-in-fact or his substitutes may do or cause to be done by
virtue hereof. This power of attorney is effective for all documents
filed on or after August 1, 1997.

WITNESS my hand on the date set forth below.

/s/Edward C. Johnson 3d July 17, 1997

Edward C. Johnson 3d