FIDELITY NEW YORK MUNICIPAL TRUST, 485BPOS, 1996-03-18

FIDELITY NEW YORK MUNICIPAL TRUST
485BPOS, 1996-03-18

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-83295)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 36 [X]
and
REGISTRATION STATEMENT (No. 811-3723)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. [ ]
Fidelity New York 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
Arthur S. Loring, 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)
(x) on March 23, 1996, pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)(i)
( ) on ( ) pursuant to paragraph (a)(i)
( ) 75 days after filing pursuant to paragraph (a)(ii)
( ) on ( ) pursuant to paragraph (a)(ii) 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.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the Notice required by
such Rule before March 31, 1996.
FIDELITY NEW YORK MUNICIPAL FUNDS:
FIDELITY NEW YORK MUNICIPAL MONEY MARKET FUND
FIDELITY NEW YORK INSURED MUNICIPAL INCOME FUND
FIDELITY NEW YORK MUNICIPAL INCOME FUND

CROSS REFERENCE SHEET
FORM N-1A

ITEM NUMBER PROSPECTUS SECTION

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. Cover Page

2 a .............................. Expenses

b, c .............................. Contents; The Funds at a Glance; Who May Want
to Invest

3 a .............................. Financial Highlights

b .............................. *

c,d .............................. Performance

4 a i............................. Charter

ii........................... The Funds at a Glance; Investment Principles and
Risks

b .............................. *

c .............................. Who May Want to Invest; Investment Principles
and Risks

5 a .............................. Charter

b i............................. Cover Page; The Funds at a Glance; Doing
Business with Fidelity; Charter

ii........................... Charter;

iii.......................... Expenses; Breakdown of Expenses

c .............................. Charter

d .............................. Charter; Breakdown of Expenses

e .............................. FMR and its Affiliates

f .............................. Expenses

g i............................. Charter

ii............................ *

5 A .............................. Performance

6 a i............................. Charter

ii........................... How to Buy Shares; How to Sell Shares;
Transaction Details; Exchange Restrictions

iii.......................... *

b ............................. *

c .............................. Transaction Details; Exchange Restrictions

d .............................. *

e .............................. Doing Business with Fidelity; How to Buy Shares;
How to Sell Shares; Investor Services

f, g .............................. Dividends, Capital Gains, and Taxes

7 a .............................. Charter; Cover Page

b .............................. Expenses; How to Buy Shares; Transaction Details

c .............................. *

d .............................. How to Buy Shares

e .............................. *

f .............................. Breakdown of Expenses

8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions

9 .............................. *

</TABLE>

* Not Applicable

CROSS REFERENCE SHEET
(CONTINUED)
FORM N-1A

ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION

<TABLE>
<CAPTION>
<S> <C> <C> <C>
10, 11 ............................ Cover Page

12 ............................ Description of the Trusts

13 a - c ............................ Investment Policies and Limitations

d ............................ Portfolio Transactions

14 a - c ............................ Trustees and Officers

15 a, b ............................ *

c ............................ Trustees and Officers

16 a i ............................ FMR

ii ............................ Trustees and Officers

iii ............................ Management Contracts

b ............................ Management Contracts

c, d ............................ Contracts with FMR Affiliates

e ............................ *

f ............................ Distribution and Service Plans

g ............................ *

h ............................ Description of the Trusts

i ............................ Contracts with FMR Affiliates

17 a ............................ Portfolio Transactions

b ............................ Portfolio Transactions

c ............................ Portfolio Transactions

d, e ............................ *

18 a ............................ Description of the Trusts

b ............................ *

19 a ............................ Additional Purchase and Redemption Information

b ............................ Additional Purchase and Redemption Information;
Valuation of Portfolio Securities

c ............................ *

20 Distributions and Taxes

21 a, b ............................ Contracts with FMR Affiliates

c ............................ *

22 a, b ............................ Performance

23 ............................ Financial Statements

</TABLE>

* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of
the funds' most recent financial reports and portfolio listing, or a copy
of the Statement of Additional Information (SAI) dated March 23, 1996. The
SAI has been filed with the Securities and Exchange Commission (SEC) and is
incorporated herein by reference (legally forms a part of the prospectus).
For a free copy of either document, call Fidelity at 1-800-544-8888.
Investments in the money market fund are neither insured nor guaranteed by
the U.S. government, and there can be no assurance that the fund will
maintain a stable $1.00 share price.
Mutual fund shares are not deposits or obligations of, or guaranteed by,
any depository institution. Shares are not insured by the FDIC, Federal
Reserve Board, or any other agency, and are subject to investment risks,
including possible loss of principal amount invested.

LIKE ALL MUTUAL
FUNDS, THESE
SECURITIES HAVE NOT
BEEN APPROVED OR
DISAPPROVED BY THE
SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION, NOR HAS
THE SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION PASSED
UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO
THE CONTRARY IS A
CRIMINAL OFFENSE.
NFR-pro-396

FIDELITY
NEW YORK
MUNICIPAL
FUNDS
Each of these funds seeks a high level of current income free from federal
income tax and New York State and City income taxes. The funds have
different strategies, however, and carry varying degrees of risk and yield
potential.
FIDELITY NEW YORK MUNICIPAL MONEY MARKET FUND
FIDELITY NEW YORK INSURED MUNICIPAL INCOME FUND
FIDELITY NEW YORK MUNICIPAL INCOME FUND
PROSPECTUS
MARCH 23, 1996(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109

CONTENTS

KEY FACTS THE FUNDS AT A GLANCE

WHO MAY WANT TO INVEST

EXPENSES Each fund's yearly
operating expenses.

FINANCIAL HIGHLIGHTS A summary
of each fund's financial data.

PERFORMANCE How each fund has
done over time.

THE FUNDS IN DETAIL CHARTER How each fund is
organized.

INVESTMENT PRINCIPLES AND RISKS
Each fund's overall approach to
investing.

BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.

YOUR ACCOUNT DOING BUSINESS WITH FIDELITY

TYPES OF ACCOUNTS Different
ways to set up your account.

HOW TO BUY SHARES Opening an
account and making additional
investments.

HOW TO SELL SHARES Taking money
out and closing your account.

INVESTOR SERVICES Services to
help you manage your account.

SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS,
ACCOUNT POLICIES AND TAXES

TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.

EXCHANGE RESTRICTIONS

KEY FACTS

THE FUNDS AT A GLANCE
MANAGEMENT: Fidelity Management & Research Company (FMR) is the management
arm of Fidelity Investments, which was established in 1946 and is now
America's largest mutual fund manager. FMR Texas Inc. (FTX), a subsidiary
of FMR, chooses investments for New York Money Market .
As with any mutual fund, there is no assurance that a fund will achieve its
goal.
NEW YORK MONEY MARKET
GOAL: High current tax-free income for New York residents while maintaining
a stable $1.00 share price.
STRATEGY: Invests in high-quality, short-term municipal money market
securities whose interest is free from federal income tax and New York
State and City income taxes.
SIZE: As of January 31, 1996, the fund had over $ 822 million in
assets.
NEW YORK INSURED
GOAL: High current tax-free income for New York residents.
STRATEGY: Invests mainly in long-term municipal securities that are covered
by insurance guaranteeing the timely payment of principal and interest, and
whose interest is free from federal income tax and New York State and City
income taxes.
SIZE: As of January 31, 1996, the fund had over $ 338 million in
assets.
NEW YORK INCOME
GOAL: High current tax-free income for New York residents.
STRATEGY: Invests mainly in longer-term investment-grade municipal
securities whose interest is free from federal income tax and New York
State and City income taxes.
SIZE: As of January 31, 1996, the fund had over $ 433 million in
assets.
WHO MAY WANT TO INVEST
These non-diversified funds may be appropriate for investors in higher tax
brackets who seek high current income that is free from federal and New
York State and City income taxes. Each fund's level of risk and potential
reward depend on the quality and maturity of its investments. New York
Money Market is managed to keep its share price stable at $1.00. New York
Insured and New York Income with their broader range of investments,
have the potential for higher yields, but also carry a higher degree of
risk. New York Insured provides a high degree of credit quality because
insurance covers the timely payment of interest and principal. However, the
cost of the insurance lowers the fund's yield. You should consider your
investment objective and tolerance for risk when making an investment
decision.
The value of the funds' investments and the income they generate will vary
from day to day, and generally reflect interest rates, market conditions,
and other federal and state political and economic news. When you sell your
shares of New York Insured and New York Income , they may be worth
more or less than what you paid for them. By themselves, these funds do not
constitute a balanced investment plan.
Non-diversified funds may invest a greater portion of their assets in
securities of individual issuers than diversified funds. As a result,
changes in the market value of a single issuer could cause greater
fluctuations in share value than would occur in a more diversified
fund.

THE SPECTRUM OF
FIDELITY FUNDS
Broad categories of Fidelity
funds are presented here in
order of ascending risk.
Generally, investors seeking
to maximize return must
assume greater risk. The
funds in this prospectus are
in the INCOME category,
except for New York Money
Market , which is in the
MONEY MARKET category.
(right arrow) MONEY MARKET Seeks
income and stability by
investing in high-quality,
short-term investments.
(right arrow) INCOME Seeks income by
investing in bonds.
(solid bullet) GROWTH AND INCOME
Seeks long-term growth and
income by investing in stocks
and bonds.
(solid bullet) GROWTH Seeks long-term
growth by investing mainly in
stocks.
(checkmark)
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell or
hold shares of a fund. See page s and - for more information about
these fees.
Maximum sales charge on purchases and
reinvested distributions None
Deferred sales charge on redemptions None
Exchange fee None
Annual account maintenance fee
(for accounts under $2,500) $12.00
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to FMR. It also incurs other expenses for
services such as maintaining shareholder records and furnishing shareholder
statements and financial reports. A fund's expenses are factored into its
share price or dividends and are not charged directly to shareholder
accounts (see page ).
The following are based on historical expenses and are
calculated as a percentage of average net assets. The funds have entered
into arrangements with their custodian and transfer agent whereby interest
earned on uninvested cash balances is used to reduce custodian and transfer
agent expenses. Including these reductions, the total fund operating
expenses presented in the tables would have been .59% and .58% for New York
Insured and New York Income, respectively.
NEW YORK MONEY MARKET
Management fee .40 %

12b-1 fee None

Other expenses .22 %

Total fund operating expenses .62 %

NEW YORK INSURED
Management fee .40 %

12b-1 fee None

Other expenses .20 %

Total fund operating expenses .60 %

NEW YORK INCOME
Management fee .40 %

12b-1 fee None

Other expenses .19 %

Total fund operating expenses .59 %

EXAMPLES: Let's say, hypothetically, that each fund's annual return is 5%
and that its operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses if you
close your account after the number of years indicated:
NEW YORK MONEY MARKET
After 1 year $ 6

After 3 years $ 20

After 5 years $ 35

After 10 years $ 77

NEW YORK INSURED
After 1 year $ 6

After 3 years $ 19

After 5 years $ 33

After 10 years $ 75

NEW YORK INCOME
After 1 year $ 6

After 3 years $ 19

After 5 years $ 33

After 10 years $ 74

These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
FINANCIAL HIGHLIGHTS
The tables that follow are included in the funds' Annual Report and have
been audited by Price Waterhouse LLP, independent accountants. Their
reports on the financial statements and financial highlights are included
in the Annual Report. The financial statements and financial highlights are
incorporated by reference into (are legally a part of) the funds' Statement
of Additional Information.
NEW YORK MUNICIPAL MONEY MARKET FUND

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share
Data and Ratios

Years ended 1996 1995 1994 1993D 1992C 1991C 1990C 1989C 1988C 1987C
January 31

Net asset
value, $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
beginning of
period 0 0 0 0 0 0 0 0 0 0

Income from .033 .024 .018 .017 .034 .046 .052 .049 .039 .037
Investment
Operations
Net interest
income

Less
Distributions (.033) (.024) (.018) (.017) (.034) (.046) (.052) (.049) (.039) (.037)
From net interest
income

Net asset
value, end $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
of period 0 0 0 0 0 0 0 0 0 0

Total
returnB 3.32 2.44 1.84 1.72 3.46 4.74 5.34 4.99 4.01 3.78
% % % % % % % % % %

Net assets,
end of $ 823 $ 737 $ 608 $ 566 $ 540 $ 541 $ 623 $ 685 $ 635 $ 466
period (In millions)

Ratio of
expenses to .62% .60% .62% .62% .64% .61% .61% .51% .56% .60%
A E E E
average net assets

Ratio of net
interest 3.26 2.42 1.83 2.26 3.39 4.64 5.21 4.91 3.96 3.69
income % % % %A % % % % % %
to average net
assets

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data
and Ratios

Years ended 1996 1995 1994F 1993D 1992C 1991C 1990C 1989C 1988C 1987C
January 31

Net asset
value, $ 10.8 $ 12.3 $ 11.8 $ 11.3 $ 10.9 $ 10.5 $ 10.7 $ 10.2 $ 10.4 $ 10.9
beginning
of 30 00 30 20 90 40 10 90 70 60
period

Income from .562 .629 .648 .509 .684 .696 .701 .683 .693 .699
Investment
Operations
Net interest
income

Net
realized and 1.056 (1.32 .780 .510 .330 .450 (.170) .420 (.180) (.480)
unrealized gain 0)
(loss)

Total from 1.618 (.691) 1.428 1.019 1.014 1.146 .531 1.103 .513 .219
investment
operations

Less
Distributions (.568) (.629) (.648) (.509) (.684) (.696) (.701) (.683) (.693) (.699)
From net G
interest income

From net -- (.070) (.310) -- -- -- -- -- -- (.010)
realized gain

In excess
of net -- (.080) -- -- -- -- -- -- -- --
realized gain

Total (.568) (.779) (.958) (.509) (.684) (.696) (.701) (.683) (.693) (.709)
distributions

Net asset
value, $ 11.8 $ 10.8 $ 12.3 $ 11.8 $ 11.3 $ 10.9 $ 10.5 $ 10.7 $ 10.2 $ 10.4
end of
period 80 30 00 30 20 90 40 10 90 70

Total
returnB 15.25 (5.48) 12.36 9.16 9.45 11.17 4.99 11.05 5.11% 1.85
% % % % % % % % %

Net assets,
end of $ 338 $ 311 $ 415 $ 359 $ 309 $ 247 $ 206 $ 179 $ 155 $ 172
period
(In millions)

Ratio of
expenses .60% .58% .58% .61% .62% .64% .65% .65% .67% .60%
to A E E
average net
assets

Ratio of
expenses .59% .58% .58% .61% .62% .64% .65% .65% .67% .60%
to H A E E
average net
assets after
expense
reductions

Ratio of
net 4.91 5.60 5.31 5.73 6.17 6.45 6.47 6.55 6.72 6.31
interest
income to % % % %A % % % % % %
average net
assets

Portfolio
turnover 74% 41% 48% 39%A 17% 33% 18% 31% 29% 30%
rate

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data
and Ratios

Years ended 1996 1995 1994F 1993D 1992C 1991C 1990C 1989C 1988C 1987C
January 31

Net asset
value, $ 11.3 $ 13.0 $ 12.6 $ 12.1 $ 11.7 $ 11.3 $ 11.6 $ 11.1 $ 11.4 $ 11.9
beginning
of 70 50 60 00 50 70 40 60 80 80
period

Income from .635 .673 .714 .580 .773 .789 .806 .796 .794 .815
Investment
Operations
Net interest
income

Net realized
and 1.177 (1.44 .850 .560 .350 .380 (.270) .480 (.220) (.330)
unrealized gain 0)
(loss)

Total from 1.812 (.767) 1.564 1.140 1.123 1.169 .536 1.276 .574 .485
investment
operations

Less
Distributions (.642) (.673) (.714) (.580) (.773) (.789) (.806) (.796) (.794) (.815)
From net G
interest income

From net -- (.210) (.460) -- -- -- -- -- (.100) (.170)
realized gain

In excess
of net -- (.030) -- -- -- -- -- -- -- --
realized gain

Total (.642) (.913) (1.17 (.580) (.773) (.789) (.806) (.796) (.894) (.985)
distributions

Net asset
value, $ 12.5 $ 11.3 $ 13.0 $ 12.6 $ 12.1 $ 11.7 $ 11.3 $ 11.6 $ 11.1 $ 11.4
end of
period 40 70 50 60 00 50 70 40 60 80

Total
returnB 16.29 (5.78) 12.70 9.60 9.80 10.59 4.62 11.81 5.26 4.05
% % % % % % % % % %

Net assets,
end of $ 434 $ 394 $ 491 $ 446 $ 412 $ 386 $ 381 $ 368 $ 312 $ 352
period
(In millions)

Ratio of
expenses .59% .58% .58% .61% .61% .59% .61% .63% .67% .60%
to A E E
average net
assets

Ratio of
expenses .58% .58% .58% .61% .61% .59% .61% .63% .67% .60%
to H A E E
average net
assets after
expense
reductions

Ratio of
net 5.26 5.77 5.45 6.08 6.52 6.81 6.87 6.99 7.10 6.76
interest
income to % % % %A % % % % % %
average net
assets

Portfolio
turnover 83% 34% 70% 45%A 30% 45% 34% 49% 64% 51%
rate

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED AND
WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE
PERIODS SHOWN.
C YEARS ENDED APRIL 30
D MAY 1, 1992 TO JANUARY 31, 1993
E FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
F EFFECTIVE FEBRUARY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
G THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES.
H FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
PERFORMANCE
Mutual fund performance can be measured as TOTAL RETURN or YIELD. The total
returns that follow are based on historical fund results.
Each fund's fiscal year runs from February 1 through January 31. The
tables below show a fund's performance over past fiscal years compared to
different measures, including a comparative index, a competitive funds
average and a measure of inflation (CPI). Data for the comparative indexes
is available only from June 30, 1993 to the present. The charts on page 12
present calendar year performance.
AVERAGE ANNUAL TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal periods ended Past 1 Past 5 Past 10
January 31, 1996 year years years

New York Money Market 3.32% 2.74% 3.67 %

New York Insured 15.25% 8.40% 7.74%

Lehman Bros. New York Insured 14.82% n/a n/a
Municipal Bond Index

Lipper New York Insured Municipal 14.24% 8.35% 7.75%
Funds Average

New York Income 16.29% 8.79% 8.09%

Lehman Bros. New York 4 Plus Year 16.15% n/a n/a
Municipal Bond Index

Lipper New York Municipal Debt Funds 14.11% 8.54% 7.93%
Average

Consumer Price Index 2.86% 2.81% 3.50%

</TABLE>

CUMULATIVE TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal periods ended Past 1 Past 5 Past 10
January 31, 1996 year years years

New York Money Market 3.32% 14.49% 43.40%

New York Insured 15.25% 49.67% 110.84%

Lehman Bros. New York Insured 14.82% n/a n/a
Municipal Bond Index

Lipper New York Insured Municipal 14.24% 49.36% 110.89%
Funds Average

New York Income 16.29% 52.39% 117.65%

Lehman Bros. New York 4 Plus Year 16.15% n/a n/a
Municipal Bond Index

Lipper New York Municipal Debt Funds 14.11% 50.67% 115.07%
Average

Consumer Price Index 2.86% 14.86% 41.06%

</TABLE>

EXPLANATION OF TERMS
UNDERSTANDING
PERFORMANCE
YIELD illustrates the income
earned by a fund over a
recent period. Seven-day
yields are the most common
illustration of money market
performance. 30-day yields
are usually used for bond
funds. Yields change daily,
reflecting changes in interest
rates.
TOTAL RETURN reflects both the
reinvestment of income and
capital gain distributions, and
any change in a fund's share
price.
(checkmark)
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. When a money
market fund yield assumes that income earned is reinvested, it is called an
EFFECTIVE YIELD. A TAX-EQUIVALENT YIELD shows what an investor would have
to earn before taxes to equal a tax-free yield. Yields for the bond funds
are calculated according to a standard that is required for all stock and
bond funds. Because this differs from other accounting methods, the quoted
yield may not equal the income actually paid to shareholders.
THE LEHMAN BROTHERS NEW YORK INSURED MUNICIPAL BOND INDEX AND THE LEHMAN
BROTHERS NEW YORK 4 PLUS YEAR MUNICIPAL BOND INDEX are comparative
indexes for New York Insured and New York Income, respectively. The Lehman
Brothers New York Insured Municipal Bond Index includes insured New York
investment-grade municipal bonds. The Lehman Brothers New York 4 Plus Year
Municipal Bond Index includes New York investment-grade municipal bonds
with maturities of four years or greater.
THE COMPETITIVE FUNDS AVERAGES are the Lipper New York Insured
Municipal Funds Average (New York Insured) and the Lipper New York
Municipal Debt Funds Average (New York Income) which currently reflect the
performance of over 14 and 88 mutual funds, respectively, with similar
objectives. These averages, which assume reinvestment of distributions, are
published by Lipper Analytical Services, Inc.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. government.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
NEW YORK INSURED
Calendar year total returns 1986 1987 1988 1989 1990 1991 1992 1993 1994
1995
New York Insured 17.33 % -3.21 % 11.25 % 9.07 %
6.19 % 12.47 % 8.56 % 12.81 % -7.9
5 % 18.48 %
Lipper New York Insured
Municipal Funds Average 17.24 % -2.62 % 11.01 %
9.49 % 5.89 % 12.54 % 9.02 % 12.30 %
-6.29 % 17.07 %
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: 17.33
Row: 2, Col: 1, Value: nil
Row: 2, Col: 2, Value: -3.21
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 11.25
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: 9.07
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: 6.19
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: 12.47
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: 8.56
Row: 8, Col: 1, Value: 0.0
Row: 8, Col: 2, Value: 12.81
Row: 9, Col: 1, Value: 0.0
Row: 9, Col: 2, Value: -7.95
Row: 10, Col: 1, Value: 0.0
Row: 10, Col: 2, Value: 18.48
(LARGE SOLID BOX) New York
Insured

NEW YORK INCOME
Calendar year total returns 1986 1987 1988 1989 1990 1991 1992 1993 1994
1995
New York Municipal 16.82 % -2.41 % 11.92 % 9.28 %
5.09 % 13.38 % 8.98 % 12.90 % -8.0
1 % 19.57 %
Lipper New York Municipal
Debt Funds Avg. 17.21 % -1.75 % 10.85 % 9.32 %
5.04 % 13.28 % 9.61 % 12.71 % -7.5
2 % 16.73 %
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: 16.82
Row: 2, Col: 1, Value: nil
Row: 2, Col: 2, Value: -2.41
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: 11.92
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: 9.279999999999999
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: 5.09
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: 13.38
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: 8.98
Row: 8, Col: 1, Value: 0.0
Row: 8, Col: 2, Value: 17.9
Row: 9, Col: 1, Value: 0.0
Row: 9, Col: 2, Value: -8.01
Row: 10, Col: 1, Value: 0.0
Row: 10, Col: 2, Value: 19.57
(LARGE SOLID BOX) New York
Income

TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUNDS IN DETAIL

CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. In technical terms New York
Municipal Money Market is currently a non-diversified fund of Fidelity New
York Municipal Trust II, and New York Insured Municipal Income and
New York Municipal Income are currently non-diversified funds of Fidelity
New York Municipal Trust. Both trusts are open-end management investment
companies. Fidelity New York Municipal Trust II was organized as a Delaware
business trust on June 20, 1991. Fidelity New York Municipal Trust was
organized as a Massachusetts business trust on April 25, 1983. There is a
remote possibility that one fund might become liable for a misstatement in
the prospectus about another fund.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review performance. The majority of trustees are not otherwise
affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
Fidelity will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. For New York Money
Market , you are entitled to one vote for each share you own. For the bond
funds, the number of votes you are entitled to is based upon the dollar
value of your investment.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which chooses their investments and handles
their business affairs. FTX, located in Irving, Texas, has primary
responsibility for providing investment management services for New York
Money Market .
FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds in
the world.
(solid bullet) Number of Fidelity mutual
funds: over 215
(solid bullet) Assets in Fidelity mutual
funds: over $366 billion
(solid bullet) Number of shareholder
accounts: over 24 million
(solid bullet) Number of investment
analysts and portfolio
managers: over 200
(checkmark)
Norman Lind is manager and Vice President of New York Insured and
New York Income , which he has managed since March 1994 and October
1993, respectively. He also manages Spartan New York Intermediate
Municipal Income, Spartan New York Municipal Income and Spartan
Municipal Income. Previously, he served as a municipal research analyst.
Mr. Lind joined Fidelity in 1986.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Service Co. (FSC) performs transfer agent
servicing functions for the funds.
FMR Corp. is the ultimate parent company of FMR and FTX. Members of the
Edward C. Johnson 3d family are the predominant owners of a class of shares
of common stock representing approximately 49% of the voting power of FMR
Corp. Under the Investment Company Act of 1940 (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, the Johnson family
may be deemed under the 1940 Act to form a controlling group with respect
to FMR Corp.
UMB Bank, n.a., is each fund's transfer agent, although it employs FSC to
perform these functions for the funds. It is located at 1010 Grand Avenue,
Kansas City, Missouri.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
NEW YORK MUNICIPAL MONEY MARKET seeks high current income that is
free from federal income tax and New York State and City income taxes while
maintaining a stable $1.00 share price by investing in high-quality,
short-term municipal money market securities of all types. FMR normally
invests at least 65% of the fund's total assets in state tax-free
securities, and normally invests so that at least 80% of the fund's income
distributions are free from federal income tax.
When you sell your shares, they should be worth the same amount as when you
bought them. Of course, there is no guarantee that the fund will maintain a
stable $1.00 share price. The fund follows industry-standard guidelines on
the quality and maturity of its investments, which are designed to help
maintain a stable $1.00 share price. The fund will purchase only
high-quality securities that FMR believes present minimal credit risks and
will observe maturity restrictions on securities it buys. In general,
securities with longer maturities are more vulnerable to price changes,
although they may provide higher yields. It is possible that a major
change in interest rates or a default on the fund's investments could cause
its share price (and the value of your investment) to change.
NEW YORK INSURED MUNICIPAL INCOME seeks high current income that is
free from federal income tax and New York State and City income taxes by
investing primarily in municipal securities that are covered by insurance
guaranteeing the timely payment of interest and principal. Although the
fund can invest in securities of any maturity, FMR seeks to manage the fund
so that it generally reacts to changes in interest rates similarly to
municipal bonds with maturities between 8 and 18 years. As of January 31,
1996, the fund's dollar-weighted average maturity was approximately
13.2 years. FMR normally invests so that at least 80% of the fund's
income distributions are free from federal and New York State and City
income taxes.
The insurance coverage for the fund's investments is obtained either by the
bond's issuer or underwriter, or purchased by the fund. The fund pays
premiums for the insurance either directly or indirectly, which increases
the credit safety of the fund's investments, but decreases its yield. It is
important to note that the insurance does not guarantee the market value of
a security or of the fund's shares.
The insurance feature provides high credit quality to the fund's portfolio,
but the fund can also invest in some uninsured securities that are judged
by FMR to be of investment-grade quality.
NEW YORK MUNICIPAL INCOME seeks high current income that is free
from federal income tax and New York State and City income taxes by
investing primarily in municipal securities judged by FMR to be of
investment-grade quality, although it can also invest in lower-quality
securities. Although the fund can invest in securities of any maturity, FMR
seeks to manage the fund so that it generally reacts to changes in interest
rates similarly to municipal bonds with maturities between 8 and 18 years.
As of January 31, 1996, the fund's dollar-weighted average maturity was
approximately 14.2 years. FMR normally invests so that at least 80%
of the fund's income distributions are free from federal and New York State
and City income taxes.
EACH FUND'S performance is affected by the economic and political
conditions within the state of New York. Both the city and state of New
York have recently experienced significant financial difficulty, and the
state's credit standing is one of the lowest in the country.
New York Money Market stresses preservation of capital, liquidity, and
income. The bond funds seek to provide a higher level of income by
investing in a broader range of securities.
The total return from a bond is a combination of income and price gains or
losses. While income is the most important component of bond returns over
time, the bond funds' emphasis on income does not mean that a fund invests
only in the highest-yielding bonds available, or that it can avoid risks to
principal. In selecting investments for the bond funds, FMR considers a
bond's income potential together with its potential for price gains or
losses. FMR focuses on assembling a portfolio of income-producing
securities that it believes will provide the best trade off between risk
and return within the range of securities that are eligible investments for
the funds.
Each fund's yield and each bond fund's share price change daily and are
based on interest rates, market conditions, other economic and political
news, and on the quality and maturity of its investments. In general, bond
prices rise when interest rates fall, and vice versa. This effect is
usually more pronounced for longer-term securities. Lower-quality
securities offer higher yields, but also carry more risk. FMR may use
various investment techniques to hedge a portion of the bond funds' risks,
but there is no guarantee that these strategies will work as intended. When
you sell your shares of the bond funds, they may be worth more or less than
what you paid for them.
If you are subject to the federal alternative minimum tax, you should note
that each fund may invest all of its assets in municipal securities issued
to finance private activities. The interest from these investments is a
tax-preference item for purposes of the tax.
FMR normally invests each fund's assets according to its investment
strategy. The funds do not expect to invest in federally taxable
obligations, and the bond funds also do not expect to invest in state
taxable obligations. When FMR considers it appropriate for defensive
purposes, however, New York Money Market temporarily may invest more
than normally permitted in taxable obligations. New York Insured and
New York Income temporarily may invest more than normally permitted
in state taxable obligations.
SECURITIES AND INVESTMENT PRACTICES
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.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed information
about the funds' investments are contained in the funds' SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its goal.
Current holdings and recent investment strategies are described in each
fund's financial reports which are sent to shareholders twice a year. For a
free SAI or financial report, call 1-800-544-8888.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Lower-quality debt securities (sometimes called "municipal junk bonds") are
considered to have speculative characteristics, and involve greater risk of
default or price changes due to changes in the issuer's creditworthiness.
The market prices of these securities may fluctuate more than
higher-quality securities and may decline significantly in periods of
general or regional economic difficulty.
The following table provides a summary of ratings assigned to debt holdings
(not including money market instruments) in New York Income 's
portfolio. These figures are dollar-weighted averages of month-end
portfolio holdings during fiscal 1996, and are presented as a percentage of
total security investments. These percentages are historical and do not
necessarily indicate the fund's current or future debt holdings.
RESTRICTIONS: New York Insured may not invest more than 35% of its
assets in uninsured securities, and may not invest in uninsured securities
judged by FMR to be of equivalent quality to those rated below Baa by
Moody's or BBB by S&P. New York Income may not invest more than
one-third of its assets in bonds judged by FMR to be of equivalent quality
to those rated Ba or lower by Moody's and BB or lower by S&P, and may not
invest in bonds of equivalent quality to bonds rated lower than B. The fund
does not currently intend to invest in bonds rated below Caa by Moody's or
CCC by S&P.
MONEY MARKET SECURITIES are high-quality, short-term obligations issued by
municipalities, local and state governments, and other entities. These
obligations may carry fixed, variable, or floating interest rates. Some
money market securities employ a trust or other similar structure to modify
the maturity, price characteristics, or quality of financial assets so that
they are eligible investments for money market funds. If the structure does
not perform as intended, adverse tax or investment consequences may result.
MUNICIPAL SECURITIES are issued to raise money for a variety of public or
private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities. They
may be issued in anticipation of future revenues and may be backed by the
full taxing power of a municipality, the revenues from a specific project,
or the credit of a private organization. The value of some or all 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. A fund may own a municipal
security directly or through a participation interest.
CREDIT SUPPORT. Issuers may employ various forms of credit enhancement,
including letters of credit, guarantees, or insurance from a bank,
insurance company, or other entity. These arrangements expose the fund to
the credit risk of the entity. In the case of foreign entities, extensive
public information about the entity may not be available and the entity may
be subject to unfavorable political, economic, or governmental developments
which might affect its ability to honor its commitment.
STATE MUNICIPAL SECURITIES include municipal obligations issued by
the state of New York or its counties, municipalities, authorities, or
other subdivisions. The ability of issuers to repay their debt can be
affected by many factors that impact the economic vitality of either the
state or a region within the state.
Other state municipal securities include obligations of the U.S.
territories and possessions such as Guam, the Virgin Islands, and Puerto
Rico, and their political subdivisions and public corporations. The economy
of Puerto Rico is closely linked to the U.S. economy, and will be affected
by the strength of the U.S. dollar, interest rates, the price stability of
oil imports, and the continued existence of favorable tax incentives.
NEW YORK INCOME
Fiscal 1996 Debt Holdings, by Rating MOODY'S STANDARD & POOR'S

INVESTORS SERVICE, INC. CORPORATION
Rating Average A Rating Averag
e A
INVESTMENT GRADE

Highest quality Aaa AAA

High quality Aa 53.9% AA 61.9%

Upper-medium grade A A

Medium grade Baa 34.9% BBB 28.6%
LOWER QUALITY

Moderately speculative Ba 0.0% BB 0.0%

Speculative B 0.0% B 0.0%

Highly speculative Caa 0.0% CCC 0.0%

Poor quality Ca 0.0% CC 0.0%

Lowest quality, no interest C C

In default, in arrears -- D 0.0%

88.8% 90.5%
A THE DOLLAR-WEIGHTED AVERAGE OF DEBT SECURITIES NOT RATED BY MOODY'S OR
S&P AMOUNTED TO 0.9%. THIS MAY INCLUDE SECURITIES RATED BY OTHER
NATIONALLY RECOGNIZED RATING SERVICES, AS WELL AS UNRATED SECURITIES. REFER
TO THE FUND'S STATEMENT OF ADDITIONAL INFORMATION FOR A MORE COMPLETE
DISCUSSION OF THESE RATINGS.

ASSET-BACKED SECURITIES include interests in pools of purchase contracts,
financing leases, or sales agreements entered into by municipalities. These
securities usually rely on continued payments by a municipality, and may
also be subject to prepayment risk.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes. Inverse floaters have interest rates that move in the
opposite direction from a benchmark, making the security's market value
more volatile.
RESTRICTIONS: The money market fund may not purchase certain types of
variable and floating rate securities which are inconsistent with the
fund's goal of maintaining a stable share price.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire land,
equipment, or facilities. If the municipality stops making payments or
transfers its obligations to a private entity, the obligation could lose
value or become taxable.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or a financial intermediary. In exchange for this benefit, the funds may
pay periodic fees or accept a lower interest rate. The credit quality of
the investment may be affected by the creditworthiness of the put provider.
Demand features, standby commitments, and tender options are types of put
features.
PRIVATE ENTITIES may be involved in some municipal securities. For example,
industrial revenue bonds are backed by private entities, and resource
recovery bonds often involve private corporations. The viability of a
project or tax incentives could affect the value and credit quality of
these securities.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, or other factors that affect security values. These techniques may
involve derivative transactions such as buying and selling options and
futures contracts and purchasing indexed securities.
FMR can use these practices to adjust the risk and return characteristics
of a fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
RESTRICTIONS: The money market fund may not use investment techniques which
are inconsistent with the fund's goal of maintaining a stable share price.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities and some other securities may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
10% of its assets would be invested in illiquid securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect a fund's yield or the market value of its assets.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry or type of
project. Economic, business, or political changes can affect all securities
of a similar type. A fund that is not diversified may be more sensitive to
these changes, and also to changes in the market value of a single issuer
or industry.
RESTRICTIONS: The funds are considered non-diversified. Generally, to meet
federal tax requirements at the close of each quarter, a fund does not
invest more than 25% of its total assets in any one issuer and, with
respect to 50% of total assets, does not invest more than 5% of its total
assets in any one issuer. These limitations do not apply to U.S. government
securities. A fund may invest more than 25% of its total assets in tax-free
securities that finance similar types of projects. New York Insured may
invest more than 25% of its assets in bonds insured by the same insurance
company.
BORROWING. A fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements. If a bond fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: A fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
NEW YORK MUNICIPAL MONEY MARKET seeks as high a level of current
income exempt from federal income tax and New York State and City income
taxes as is consistent with preservation of capital. The fund will normally
invest so that at least 80% of its income distributions are free from
federal income tax.
NEW YORK INSURED MUNICIPAL INCOME seeks as high a level of current
income, exempt from federal and New York State and City income taxes,
available from investing primarily in municipal securities that are covered
by insurance guaranteeing the timely payment of principal and interest. FMR
will invest the fund's assets primarily in municipal bonds that are (1)
insured under an insurance policy obtained by the issuer or underwriter; or
(2) insured under an insurance policy purchased by the fund. Insurance will
cover the timely payment of interest and principal on municipal obligations
and will be retained from recognized insurers. The fund may invest in
uninsured municipal obligations judged to be of quality equivalent to the
four highest ratings assigned by Moody's and S&P (Baa, BBB, or better).
Under normal market conditions, such uninsured obligations may not exceed
35% of the fund's assets. The fund will normally invest so that at least
80% of its income distributions are exempt from federal and New York State
and City income taxes. During periods when FMR believes that New York
municipals that meet the fund's standards are not available, the fund may
temporarily invest more than 20% of its assets in obligations that are only
federally tax-exempt.
NEW YORK MUNICIPAL INCOME seeks as high a level of current income,
exempt from federal and New York State and City income taxes, available
from investing primarily in municipal securities judged by FMR to be of
investment-grade quality. The fund may invest up to one-third of its assets
in lower-quality bonds, but may not purchase bonds that are judged by FMR
to be equivalent quality to those rated lower than B. The fund will
normally invest so that at least 80% of its income distributions are exempt
from federal and New York State and City income taxes. During periods when
FMR believes that New York municipals that meet the fund's standards are
not available, the fund may temporarily invest more than 20% of its assets
in obligations that are only federally tax-exempt.
EACH FUND may borrow only for temporary or emergency purposes, exceeding
33% of its total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services for New York Municipal Money Market.
Each fund also pays OTHER EXPENSES, which are explained on page .
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 terminated
at any time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fee is
calculated by adding a group fee rate to an individual fund fee rate, and
multiplying the result by the fund's average net assets.
The group fee rate is based on the average net assets of all the mutual
funds advised by FMR. This rate cannot rise above .37%, and it drops as
total assets under management increase.
For January 1996, the group fee rate was .1476 %. Each fund's
individual fund fee rate is .25%. Each fund's total management fee rate for
fiscal 1996 was .40 %.
FMR HAS A SUB-ADVISORY AGREEMENT with FTX, which has primary responsibility
for providing investment management for New York Money Market , while
FMR retains responsibility for providing other management services. FMR
pays FTX 50% of its management fee (before expense reimbursements) for
these services.
OTHER EXPENSES
While the management fee is a significant component of the funds' annual
operating costs, the funds have other expenses as well.
FSC performs many transaction and accounting functions. These services
include processing shareholder transactions, valuing each fund's
investments, and handling securities loans. In fiscal 1996, FSC received
fees equal to .20%, .17% and .17% of New York Money Market 's ,
New York Insured 's, and New York Income's average net
assets, respectively.
The funds also pay other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity.
Each fund has adopted a Distribution and Service Plan. These plans
recognize that FMR may use its resources, including management fees, to pay
expenses associated with the sale of fund shares. This may include payments
to third parties, such as banks or broker-dealers, that provide shareholder
support services or engage in the sale of the fund's shares. It is
important to note, however, that the funds do not pay FMR any separate fees
for this service.
For fiscal 1996, the portfolio turnover rates for New York Insured
and New York Income were 74 % and 83 %,
respectively. These rates vary from year to year.

UNDERSTANDING THE
MANAGEMENT FEE
The management fee FMR
receives is designed to be
responsive to changes in
FMR's total assets under
management. Building this
variable into the fee
calculation assures
shareholders that they will
pay a lower rate as FMR's
assets under management
increase.
(checkmark)
YOUR ACCOUNT

DOING BUSINESS WITH FIDELITY
Fidelity Investments 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-sheltered
retirement plans for individuals investing on their own or through their
employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over 80 walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in a fund through a brokerage account. You can
choose New York Money Market as your core account for your Fidelity Ultra
Service Account(registered trademark) or FidelityPlusSM brokerage account.
If you are investing through FBSI or another financial institution or
investment professional, refer to its program materials for any special
provisions regarding your investment in the fund.
The different ways to set up (register) your account with Fidelity are
listed in the table that follows.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
EACH FUND'S SHARE PRICE, called net asset value (NAV), is calculated every
business day. New York Money Market is managed to keep its share price
stable at $1.00. Each fund's shares are sold without a sales charge.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time, and also at noon for New York Money Market.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another Fidelity
fund.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For New York Money Market $5,000
TO ADD TO AN ACCOUNT $250
Through automatic investment plans $100
MINIMUM BALANCE $1,000
These minimums may vary for investments through Fidelity Portfolio Advisory
Services. Refer to the program materials for details.

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TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT

Phone 1-800-544-777 (phone_graphic) (small solid bullet) Exchange from another (small solid bullet) Exchange from another
Fidelity fund account Fidelity fund account
with the same with the same
registration, including registration, including
name, address, and name, address, and
taxpayer ID number. taxpayer ID number.
(small solid bullet) Use Fidelity Money
Line to transfer from
your bank account. Call
before your first use to
verify that this service
is in place on your
account. Maximum
Money Line: $50,000.

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Mail (mail_graphic) (small solid bullet) Complete and sign the (small solid bullet) Make your check
application. Make your payable to the complete
check payable to the name of the fund.
complete name of the Indicate your fund
fund of your choice. account number on
Mail to the address your check and mail to
indicated on the the address printed on
application. your account statement.
(small solid bullet) Exchange by mail: call
1-800-544-6666 for
instructions.

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In Person (hand_graphic) (small solid bullet) Bring your application (small solid bullet) Bring your check to a
and check to a Fidelity Fidelity Investor Center.
Investor Center. Call Call 1-800-544-9797 for
1-800-544-9797 for the the center nearest you.
center nearest you.

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Wire (wire_graphic) (small solid bullet) Call 1-800-544-7777 to (small solid bullet) Wire to:
set up your account For the bond funds:
and to arrange a wire Bankers Trust
transaction. Company,
(small solid bullet) For the bond funds: Bank Routing
Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify the complete
Bank Routing name of the fund and
#021001033, include your account
Account #00163053. number and your
Specify the complete name.
name of the fund and (small solid bullet) For the money market
include your new fund:
account number and Bank Routing
your name. #021000128
(small solid bullet) For the money market FFC Fidelity/SAS INST
fund: DEP
Bank Routing Account # 323039502
#021000128 Specify the complete
FFC Fidelity/SAS INST name of the fund and
DEP include your account
Account # 323039502 number.
Specify the complete
name of the fund and
include your account
number.

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Automatically (automatic_graphic) (small solid bullet) Not available. (small solid bullet) Use Fidelity Automatic
Account Builder. Sign
up for this service
when opening your
account, or call
1-800-544-6666 to add
it.

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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118

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HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next share price calculated after your order is received and accepted.
Share price is normally calculated at 4 p.m. Eastern time and also at noon
for New York Money Market.
TO SELL SHARES THROUGH YOUR FIDELITY ULTRA SERVICE OR FIDELITYPLUS ACCOUNT,
call 1-800-544-6262 to receive a handbook with instructions.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000
worth of shares in the account to keep it open.
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
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 redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(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.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
and
(small solid bullet) Any other applicable requirements listed in the table
that follows.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited number
of checks. Do not, however, try to close out your account by check.
ACCOUNT TYPE SPECIAL REQUIREMENTS

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Phone 1-800-544-777 (phone_graphic) All account types (small solid bullet) Maximum check request:
$100,000.
(small solid bullet) For Money Line transfers to
your bank account; minimum:
$10; maximum: $100,000.
(small solid bullet) You may exchange to other
Fidelity funds if both
accounts are registered with
the same name(s), address,
and taxpayer ID number.

Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (small solid bullet) The letter of instruction must
Tenant, be signed by all persons
Sole Proprietorship required to sign for
, UGMA, UTMA transactions, exactly as their
Trust names appear on the
account.
(small solid bullet) The trustee must sign the
letter indicating capacity as
Business or trustee. If the trustee's name
Organization is not in the account
registration, provide a copy of
the trust document certified
within the last 60 days.
(small solid bullet) At least one person
Executor, authorized by corporate
Administrator, resolution to act on the
Conservator, account must sign the letter.
Guardian (small solid bullet) Include a corporate
resolution with corporate seal
or a signature guarantee.
(small solid bullet) Call 1-800-544-6666 for
instructions.

Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire
feature before using it. To
verify that it is in place, call
1-800-544-6666. Minimum
wire: $5,000.
(small solid bullet) Your wire redemption request
must be received by Fidelity
before 4 p.m. Eastern time
for money to be wired on the
next business day.

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Check (check_graphic) All account types (small solid bullet) Minimum check: $500.
(small solid bullet) All account owners must sign
a signature card to receive a
checkbook.

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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118

</TABLE>

INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)

24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT BALANCES
1-800-544-7544
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
QUOTES
1-800-544-8544
RETIREMENT ACCOUNT
ASSISTANCE
1-800-544-4774
AUTOMATED SERVICE
(checkmark)
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 the fund. Call 1-800-544-6666 if you need copies of
financial reports or historical account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing.
Note that exchanges out of a fund are limited to four per calendar year
(except for New York Money Market) and that they may have tax
consequences for you. For details on policies and restrictions governing
exchanges, including circumstances under which a shareholder's exchange
privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your
account.
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans 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 a
home, educational expenses, and other long-term financial goals.
REGULAR INVESTMENT PLANS

FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND

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MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly or (small solid bullet) For a new account, complete the
quarterly appropriate section on the fund
application.
(small solid bullet) For existing accounts, call
1-800-544-6666 for an application.
(small solid bullet) To change the amount or frequency of
your investment, call 1-800-544-6666 at
least three business days prior to your
next scheduled investment date.

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

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<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay (small solid bullet) Check the appropriate box on the fund
period application, or call 1-800-544-6666 for an
authorization form.
(small solid bullet) Changes require a new authorization
form.

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND

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<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, (small solid bullet) To establish, call 1-800-544-6666 after
bimonthly, both accounts are opened.
quarterly, or (small solid bullet) To change the amount or frequency of
annually your investment, call 1-800-544-6666.

</TABLE>

A BECAUSE BOND FUND SHARE PRICES FLUCTUATE, THOSE FUNDS MAY NOT BE
APPROPRIATE CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES

DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly. Capital gains earned by the bond funds are
normally distributed in March and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. Each fund offers four
options (three for New York Money Market):
1. REINVESTMENT OPTION. Your dividend 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. Your capital gain distributions, if any, will be
automatically reinvested, but you will be sent a check for each dividend
distribution. This option is not available for New York Money
Market.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions, if any.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions, if any, will be automatically invested in
another identically registered Fidelity fund.
Dividends will be reinvested at the fund's NAV on the last day of the
month. Capital gain distributions, if any, will be reinvested at the NAV as
of the date the fund deducts the distribution from its NAV. The mailing of
distribution checks will begin within seven days.
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you
are entitled to your share of
the fund's net income and
gains on its investments. The
fund passes its earnings
along to its investors as
DISTRIBUTIONS.
Each fund earns interest from
its investments. These are
passed along as DIVIDEND
DISTRIBUTIONS. The fund may
realize capital gains if it sells
securities for a higher price
than it paid for them. These
are passed along as CAPITAL
GAIN DISTRIBUTIONS. Money
market funds usually don't
make capital gain
distributions.
(checkmark)
TAXES
As with any investment, you should consider how an investment in a tax-free
fund could affect you. Below are some of the funds' tax implications.
TAXES ON DISTRIBUTIONS. Interest income that a fund earns is distributed to
shareholders as income dividends. Interest that is federally tax-free
remains tax-free when it is distributed.
However, gain on the sale of tax-free bonds results in taxable
distributions. Short-term capital gains and a portion of the gain on bonds
purchased at a discount are taxed as dividends. Long-term capital gain
distributions are taxed as long-term capital gains. These distributions are
taxable when they are paid, whether you take them in cash or reinvest them.
However, distributions declared in December and paid in January are taxable
as if they were paid on December 31. Fidelity will send you and the IRS a
statement showing the tax status of the distributions paid to you in the
previous year.
The interest from some municipal securities is subject to the federal
alternative minimum tax. Each fund may invest up to 100% of its assets in
these securities. Individuals who are subject to the tax must report this
interest on their tax returns.
During fiscal 1996, 100 % of New York Money Market's,
99.0 % of New York Insured's, and 98.5 % of New York
Income's dividends were free from federal, New York State, and New
York City taxes. 19.6 % of New York Money Market's, 0 % of New
York Insured's, and 0 % of New York Income' s dividends were
subject to the federal alternative minimum tax.
TAXES ON TRANSACTIONS. Your bond fund redemptions - including exchanges to
other Fidelity funds - are subject to capital gains tax. A capital gain or
loss is the difference between the cost of your shares and the price you
receive when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before a fund deducts a capital
gain distribution from its NAV, you will pay the full price for the shares
and then receive a portion of the price back in the form of a taxable
distribution.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's NAV as of the close of
business of the NYSE, normally 4 p.m. Eastern time, and also at noon for
New York Money Market.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
The money market fund values the securities it owns on the basis of
amortized cost. This method minimizes the effect of changes in a security's
market value and helps the fund to maintain a stable $1.00 share price. For
the bond funds, assets are valued primarily on the basis of market
quotations, if available. Since market quotations are often unavailable,
assets are usually valued by a method that the Board of Trustees believes
accurately reflects fair value.
EACH FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
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.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
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) Each fund 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
cancelled and you could be liable for any losses or fees a fund or its
transfer agent has incurred.
(small solid bullet) You begin to earn dividends as of the first business
day following the day of your purchase.
(small solid bullet) Money market fund shares purchased by 12:00 noon
Eastern time will earn the dividend declared that day; money market fund
shares purchased by 4:00 p.m. Eastern time begin to earn dividends on the
following business day.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY OR SELL SHARES OF THE FUNDS THROUGH A BROKER, who may charge
you a fee for this service. If you invest through a broker or other
institution, read its program materials for any additional service features
or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
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
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay you.
(small solid bullet) Money market fund shares redeemed before 12:00 noon
Eastern time do not earn the dividend declared on the day of redemption.
Bond fund shares will earn dividends through the date of redemption;
however, shares redeemed on a Friday or prior to a holiday will continue to
earn dividends until the next business day.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) Each fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
(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.
FIDELITY RESERVES THE RIGHT TO 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 $60.00 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 the transfer agent, is designed to offset in part the
relatively higher costs of servicing smaller accounts. The fee will not be
deducted from retirement accounts (except non-prototype retirement
accounts), accounts using regular investment plans, core accounts for a
Fidelity Ultra Service Account or a FidelityPlus brokerage account, or if
total assets in Fidelity funds exceed $50,000. Eligibility for the $50,000
waiver is determined by aggregating Fidelity mutual fund accounts
maintained by FSC 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 $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the funds without
reimbursement from the funds. Qualified recipients are securities dealers
who have sold fund shares or others, including banks and other financial
institutions, under special arrangements in connection with FDC's sales
activities. In some instances, these incentives may be offered only to
certain institutions whose representatives provide services in connection
with the sale or expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
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:
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange 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) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, New York Insured Municipal Income and New York
Municipal Income reserve the right to 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, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) Each fund reserves the right to 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.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.

This prospectus is printed on recycled paper using soy-based inks.
FIDELITY NEW YORK MUNICIPAL MONEY MARKET FUND
A FUND OF FIDELITY NEW YORK MUNICIPAL TRUST II
FIDELITY NEW YORK INSURED MUNICIPAL INCOME FUND
FIDELITY NEW YORK MUNICIPAL INCOME FUND
FUNDS OF FIDELITY NEW YORK MUNICIPAL TRUST
STATEMENT OF ADDITIONAL INFORMATION
MARCH 23, 1996
This Statement is not a prospectus but should be read in conjunction with
the funds' current Prospectus (dated March 23, 1996). Please retain this
document for future reference. The funds' financial statements and
financial highlights, included in the Annual Report for the fiscal year
ended January 31, 1996, are incorporated herein by reference. To obtain an
additional copy of the Prospectus or the Annual Report, please call
Fidelity Distributors Corporation at 1-800-544-8888.
TABLE OF CONTENTS PAGE

Investment Policies and Limitations

Special Considerations Affecting New York

Special Considerations Affecting Puerto Rico

Portfolio Transactions

Valuation of Portfolio Securities

Performance

Additional Purchase and Redemption Information

Distributions and Taxes

FMR

Trustees and Officers

Management Contracts

Distribution and Service Plans

Contracts with FMR Affiliates

Description of the Trusts

Financial Statements

Appendix

INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISER
FMR Texas Inc. (FTX) (money market fund)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
UMB Bank, n.a. (UMB)
and Fidelity Service Co. (FSC)
NFR-ptb-396
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.
Each 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) of the fund.
However, except for the Fundamental Investment Limitations listed below
and the policies restated in the "FUNDAMENTAL POLICIES" paragraph on page
1 3, the investment policies and limitations described in this Statement
of Additional Information are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF NEW YORK INCOME MONEY MARKET FUND
( NEW YORK MONEY MARKET )
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities;
(2) make short sales of securities;
(3) purchase any securities on margin, except for such short-term credits
as are necessary for the clearance of transactions;
(4) 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 the value of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of the fund's total assets by reason of a decline in
net assets will be reduced (within three business days) to the extent
necessary to comply with the 33 1/3% limitation;
(5) 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;
(6) 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;
(7) purchase or sell real estate, but this shall not prevent the fund from
investing in municipal bonds or other obligations secured by real estate or
interests therein;
(8) purchase or sell commodities or commodity (futures) contracts;
(9) 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 repurchase agreements);
or
(10) invest in oil, gas, or other mineral exploration or development
programs.
Investment limitation (4) is construed in conformity with the 1940 Act,
and, accordingly, "three business days" means three days exclusive of
Sundays and holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) To meet federal tax requirements for qualification as a "regulated
investment company," the fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(ii) 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) if, as a result, the fund would hold more
than 10% of the outstanding voting securities of that issuer.
(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 (4)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(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 purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(vii) 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.
(viii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(ix) The fund does not currently intend to purchase the securities of
any issuer (other than securities issued or guaranteed by domestic or
foreign governments or political subdivisions thereof) if, as a result,
more than 5% of its total assets would be invested in the securities of
business enterprises that, including predecessors, have a record of less
than three years of continuous operation.
For purposes of limitations (6) 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 (ix) pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the money market fund's policies on quality and maturity, see the
section entitled "Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF NEW YORK INSURED MUNICIPAL INCOME FUND
(NEW YORK INSURED)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as 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; or
(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) To meet federal tax requirements for qualification as a "regulated
investment company," the fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(ii) 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) if, as a result, the fund would hold more
than 10% of the outstanding voting securities of that issuer.
(iii) 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.
(iv) 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.
(v) 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)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(vi) 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.
(vii) 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.
(viii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) 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.
(xi) The fund does not currently intend to purchase the securities of
any issuer (other than securities issued or guaranteed by domestic or
foreign governments or political subdivisions thereof) if, as a result,
more than 5% of its total assets would be invested in the securities of
business enterprises that, including predecessors, have a record of less
than three years of continuous operation.
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.
For New York Insured fund's limitations on futures and options
transactions, see the section entitled "Limitations on Futures and Options
Transactions" beginning on page .
INVESTMENT LIMITATIONS OF NEW YORK INCOME FUND
(NEW YORK INCOME)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as 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 the value 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; or
(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) To meet federal tax requirements for qualification as a "regulated
investment company," the fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(ii) 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) if, as a result, the fund would hold more than 10% of
the outstanding voting securities of that issuer.
(iii) 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.
(iv) 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.
(v) 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)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(vi) 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.
(vii) 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.
(viii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) 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.
(xi) The fund does not currently intend to purchase the securities of
any issuer (other than securities issued or guaranteed by domestic or
foreign governments or political subdivisions thereof) if, as a result,
more than 5% of its total assets would be invested in the securities of
business enterprises that, including predecessors, have a record of less
than three years of continuous operation.
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.
For municipal income fund's limitations on futures and options
transactions, see the section entitled "Limitations on Futures and Options
Transactions" beginning on page .
Each fund's investments must be consistent with its investment objective
and policies. Accordingly, not all of the security types and investment
techniques discussed below are eligible investments for each of the funds.
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 Investment Company Act of 1940. These
transactions may include 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.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by a fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered. The
bond funds may receive fees for entering into delayed-delivery
transactions.
When purchasing securities on a delayed-delivery basis, each fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If a fund remains substantially fully
invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When a fund has sold a security on a delayed-delivery
basis, 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, the fund could miss
a favorable price or yield opportunity, or could suffer a loss.
Each fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
FEDERALLY TAXABLE OBLIGATIONS. Under normal conditions, the funds do not
intend to invest in securities whose interest is federally taxable.
However, from time to time on a temporary basis, each fund may invest a
portion of its assets in fixed-income obligations whose interest is subject
to federal income tax.
Should a fund invest in federally taxable obligations, it would purchase
securities that in FMR's judgment are of high quality. These would include
obligations issued or guaranteed by the U.S. government or its agencies or
instrumentalities; obligations of domestic banks; and repurchase
agreements. The bond funds' standards for high-quality, taxable obligations
are essentially the same as those described by Moody's Investors Service,
Inc. (Moody's) in rating corporate obligations within its two highest
ratings of Prime-1 and Prime-2, and those described by Standard & Poor's
(S&P) in rating corporate obligations within its two highest ratings of
A-1 and A-2. New York Money Market will purchase taxable obligations only
if they meet its quality requirements.
Proposals to restrict or eliminate the federal income tax exemption for
interest on municipal obligations are introduced before Congress from time
to time. Proposals also may be introduced before the New York legislature
that would affect the state tax treatment of the funds' distributions. If
such proposals were enacted, the availability of municipal obligations and
the value of the funds' holdings would be affected and the Trustees would
reevaluate the funds' investment objectives and policies.
FUTURES AND OPTIONS. The following sections pertain to futures
and options: Asset Coverage for Futures and Options Positions, 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.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The funds will comply
with guidelines established by the Securities and Exchange Commission with
respect to coverage of options and futures strategies by mutual funds, and
if the guidelines so require will set aside appropriate liquid assets in a
segregated custodial account in the amount prescribed. Securities held in a
segregated account cannot be sold while the futures or option strategy is
outstanding, unless they are replaced with other suitable assets. As a
result, there is a possibility that segregation of a large percentage of a
fund's assets could impede portfolio management or the fund's ability to
meet redemption requests or other current obligations.
COMBINED POSITIONS. A fund may purchase and write 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, a fund may purchase a put option and write a call option on the
same underlying instrument, in order to 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, in order 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. The funds may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which they typically
invest, which involves a risk that the options or futures position will not
track the performance of a 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. When a fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
a fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters 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. Each 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 funds intend to comply with Rule 4.5 under the
Commodity Exchange Act, which limits the extent to which the funds can
commit assets to initial margin deposits and option premiums.
In addition, each 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 funds' investments in futures contracts and
options, and the funds' policies regarding futures contracts and options
discussed elsewhere in this Statement of Additional Information, are not
fundamental policies and 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 for a fund 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 funds 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, a fund 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 fund 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 fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. A fund 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
paid, 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. When a fund writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, the fund 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. When writing an option on a futures
contract, the fund will be required to make margin payments to an FCM as
described above for futures contracts. A fund may seek to terminate its
position in a put option it writes 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 the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
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 a fund 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 INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. 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 instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
For the money market fund, FMR may determine some restricted securities and
municipal lease obligations to be illiquid.
For the bond funds, investments currently considered to be illiquid include
over-the-counter options. Also, FMR may determine some restricted
securities and municipal lease obligations to be illiquid. However, with
respect to over-the-counter options a fund writes, all or a portion of the
value of the underlying instrument may be illiquid depending on the assets
held to cover the option and the nature and terms of any agreement the fund
may have to close out the option before expiration.
In the absence of market quotations, illiquid investments for the money
market fund are valued for purposes of monitoring amortized cost valuation,
and for the bond funds are priced at fair value as determined in good faith
by a committee appointed by the Board of Trustees. If through a change in
values, net assets, or other circumstances, a fund were in a position where
more than 10% of its net assets was invested in illiquid securities, it
would seek to take appropriate steps to protect liquidity.
INDEXED SECURITIES. A fund may purchase securities 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. One example of indexed securities is inverse floaters.
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. At the same time,
indexed securities are subject to the credit risks associated with the
issuer of the security, and their values may decline substantially if the
issuer's creditworthiness deteriorates. Indexed securities may be more
volatile than the underlying instruments.
INSURANCE FEATURE. Under normal market conditions, New York Insured will
invest primarily in municipal bonds that, at the time of purchase, either
(1) are insured under fund insurance issued to the fund by an insurer or
(2) are insured under an insurance policy obtained by the issuer or
underwriter of such municipal bonds at the time of original issuance
thereof (issuer insurance). If a municipal bond is already covered by
issuer insurance when acquired by the fund, then coverage will not be
duplicated by fund insurance; if a municipal bond is not covered by issuer
insurance, it may be covered by fund insurance purchased by the fund. The
fund may also purchase municipal notes that are insured, although, in
general, municipal notes are not presently issued with issuer insurance,
and the fund does not generally expect to cover municipal notes under its
fund insurance. Accordingly, the fund does not presently expect that any
significant portion of the municipal notes it purchases will be covered by
insurance. Securities other than municipal bonds and notes purchased by the
fund will not be covered by insurance. Based upon the expected composition
of the fund, FMR estimates that the annual premiums for fund insurance will
range from .10% to .35% of the fund's average net assets. During the fiscal
year February 1, 1995 to January 31, 1996, New York Insured purchased
$255,160,000 of insurance. Although the insurance feature reduces
certain financial risks, the premiums for fund insurance, which are paid
from the fund's assets, and the restrictions on investments imposed by fund
insurance guidelines, reduce the fund's current yield.
Insurance will cover the timely payment of interest and principal on
municipal obligations and will be obtained from recognized insurers. In
order to be considered as eligible insurance by the fund, such insurance
policies must guarantee the timely payment of all principal and interest on
the municipal bonds as they become due. However, such insurance may provide
that in the event of non-payment of interest or principal when due, with
respect to an insured municipal bond, the insurer is not obligated to make
such payment until a specified time period (which may be thirty days or
more) after it has been notified by the fund that such non-payment has
occurred. For these purposes, a payment of principal is due only at final
maturity of the municipal bond and not at the time any earlier sinking fund
payment is due. The insurance does not guarantee the market value of the
municipal bonds or the value of the shares of the fund and, except as
described below and in the section entitled "Valuation of Portfolio
Securities," has no effect on the price or redemption value of fund shares.
Municipal bonds are generally eligible for insurance under fund insurance
if, at the time of purchase by the fund, they are identified separately or
by category in qualitative guidelines furnished by the fund insurer and are
in compliance with the aggregate limitations on amounts set forth in such
guidelines. Premium variations are based in part on the rating of the
municipal bond being insured at the time the fund purchases the bond. The
insurer may prospectively withdraw particular municipal bonds from the
classifications of bonds eligible for insurance or change the aggregate
amount limitation of each issue or category of eligible municipal bonds,
but must continue to insure the full amount of such bonds previously
acquired which the insurer has indicated are eligible so long as they
remain in the fund. The qualitative guidelines and aggregate amount
limitations established by the insurer from time to time will not
necessarily be the same as those the fund or FMR would use to govern
selection of municipal bonds for the fund's investments. Therefore, from
time to time such guidelines and limitations may affect investment
decisions.
Because coverage under the fund insurance terminates upon sale of a
municipal bond from the fund, the insurance does not have any effect on the
resale value of such a bond. Therefore, FMR may decide to retain any
insured municipal bonds which are in default or, in FMR's view, in
significant risk of default, and place a value on the insurance. This value
will be equal to the difference between the market value of the defaulted
municipal bond and the market value of similar municipal bonds that are not
in default. As a result, FMR may be limited in its ability to manage the
fund to the extent that it holds defaulted municipal bonds, which will
limit its ability in certain circumstances to purchase other municipal
bonds. While a defaulted municipal bond is held by the fund, the fund
continues to pay the insurance premium thereon but also collects interest
payments from the insurer and retains the right to collect the full amount
of principal from the insurer when the municipal bond comes due. The fund
expects that the market value of a defaulted municipal bond covered by
issuer insurance will generally be greater than the market value of an
otherwise comparable defaulted municipal bond covered by fund insurance.
PRINCIPAL BOND INSURERS. AMBAC Indemnity Corporation (AMBAC Indemnity)
is a Wisconsin-domiciled stock insurance corporation regulated by the
Office of the Commissioner of Insurance of the State of Wisconsin and
licensed to do business in 50 states, the District of Columbia, and the
Commonwealth of Puerto Rico, with admitted assets of approximately
$2,292,000,000 (unaudited) and statutory capital of approximately
$1,283,000,000 (unaudited) as of September 30, 1995. Statutory capital
consists of AMBAC Indemnity's policyholders' capital and surplus of
$814,775,000 and statutory contingency reserve of $468,303,000. AMBAC
Indemnity is a wholly owned subsidiary of AMBAC Inc., a 100% publicly-held
company. Moody's and S&P have both assigned a triple-A claims-paying
ability rating to AMBAC Indemnity.
Financial Security Assurance Inc. (Financial Security) is a "Aaa/AAA" rated
monoline insurance company incorporated in 1984 under the laws of the State
of New York. Financial Security is licensed, directly or through its
subsidiaries, to engage in financial guaranty insurance business in all 50
states, the District of Columbia, Puerto Rico and the United Kingdom.
The claims-paying ability of Financial Security is rated "Aaa" by Moody's
Investors Service, Inc. and "AAA" by Standard & Poor's Ratings Services. As
of September 30, 1995 Financial Security's unearned premium reserve was
$216,931, total shareholder's equity was $590,473 total unearned premium
reserve and shareholder's equity was $807,404, and qualified statutory
capital of $495,000,000 consisting of capital and surplus of $352,000,000
and contingency reserve of $143,000,000.
On December 20, 1995, Capital Guaranty Corporation (CGC) merged with a
subsidiary of Financial Security Assurance Holdings Ltd. (Holdings) and
Capital Guaranty Insurance Company (CGIC), CGC's principal operating
subsidiary, changed its name to Financial Security Assurance of Maryland
Inc. (FSA Maryland) and became a wholly owned subsidiary of Financial
Security.
FGIC Corporation, through its wholly owned subsidiary Financial Guaranty
Insurance Company, is a leading insurer of municipal bonds, including new
issues and bonds held in unit investment trusts and mutual funds. Municipal
bonds insured by Financial Guaranty are rated Aaa/AAA/AAA by Moody's, S&P,
and Fitch, respectively. In accordance with statutory accounting
principles, Financial Guaranty's capital base as of September 30, 1995
totalled $1.4 billion, comprised of capital and surplus of $994.5 million
and a contingency reserve of $386.5 million.
Municipal Bond Investors Assurance Corporation (MBIA) is the principal
operating subsidiary of MBIA Inc., a New York Stock Exchange listed
company. MBIA Inc. is not obligated to pay the debts of, or claims against,
MBIA. MBIA is a limited liability corporation rather than a several
liability association. MBIA is domiciled in the state of New York and
licensed to do business in all 50 states, the District of Columbia and the
Commonwealth of Puerto Rico. Moody's rates all bond issues insured by MBIA
"Aaa" and short-term loans "MIG-1," both designated to be of the highest
quality; S&P rates all new issues insured by MBIA "AAA" Prime Grade. As of
September 30, 1995, the Insurer had admitted assets of $3.7 billion
(unaudited), total liabilities of $2.5 billion (unaudited), total capital
and surplus of $1.2 billion (unaudited), contingency reserve of
$713,324,000 and qualified statutory capital of $1,907,780,000 determined
in accordance with statutory accounting practices prescribed or permitted
by insurance regulatory authorities.
INTERFUND BORROWING PROGRAM. Pursuant to an exemptive order issued by the
SEC, each fund has received permission to lend money to, and borrow money
from, other funds advised by FMR or its affiliates, but will participate in
the interfund borrowing program only as a borrower. Interfund borrowings
normally extend overnight, but can have a maximum duration of seven days. A
fund will borrow through the program only when the costs are equal to or
lower than the costs of bank loans. Loans may be called on one day's
notice, and 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 prevailing short-term interest rate levels -
rising when prevailing short-term interest rates fall, and vice versa. This
interest rate feature can make the prices of inverse floaters considerably
more volatile than bonds with comparable maturities.
LOWER-QUALITY MUNICIPAL SECURITIES. New York Income may invest a
portion of its assets in lower-quality municipal securities as described in
the Prospectus.
While the market for New York municipals is considered to be substantial,
adverse publicity and changing investor perceptions may affect the ability
of outside pricing services used by a fund to value its portfolio
securities, and the fund's ability to dispose of lower-quality bonds. The
outside pricing services are monitored by FMR and reported to the Board to
determine whether the services are furnishing prices that accurately
reflect fair value. The impact of changing investor perceptions may be
especially pronounced in markets where municipal securities are thinly
traded.
The fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise 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.
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. 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
New York Money Market fund to maintain a stable net asset value per share.
MONEY MARKET SECURITIES are high-quality, short-term obligations. Some
money market securities employ a trust or other similar structure to modify
the maturity, price characteristics, or quality of financial assets. 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 the structure does not perform 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 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 SECTORS:
TRANSPORTATION. Transportation debt may be issued to finance the
construction of airports, toll roads, highways, or other transit
facilities. Airport bonds are dependent on the general stability of the
airline industry and on the stability of a specific carrier who uses the
airport as a hub. Air traffic generally follows broader economic trends and
is also affected by the price and availability of fuel. Toll road bonds are
also affected by the cost and availability of fuel as well as toll levels,
the presence of competing roads and the general economic health of an area.
Fuel costs and availability also affect other transportation-related
securities, as do the presence of alternate forms of transportation, such
as public transportation.
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, the funds will not
hold such 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 a fund a specified,
undivided interest in the obligation in proportion to its purchased
interest in the total amount of the obligation.
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.
PUT FEATURES entitle the holder to sell a security back to the issuer or a
third party at any time or at specified intervals. They 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.
QUALITY AND MATURITY (MONEY MARKET FUND ONLY). Pursuant to procedures
adopted by the Board of Trustees, the fund may purchase only high-quality
securities that FMR believes present minimal credit risks. To be considered
high-quality, a security must be rated in accordance with applicable rules
in one of the two highest categories for short-term securities by at least
two nationally recognized rating services (or by one, if only one rating
service has rated the security); or, if unrated, judged to be of equivalent
quality by FMR.
High-quality securities are divided into "first tier" and "second tier"
securities. First tier securities are those deemed to be in the highest
rating category (e.g., Standard & Poor's A-1 or SP-1), and second tier
securities are those deemed to be in the second highest rating category
(e.g., Standard & Poor's A-2 or SP-2).
The fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a dollar-weighted
average maturity of 90 days or less. When determining the maturity of a
security, the fund may look to an interest rate reset or demand feature.
REFUNDING CONTRACTS. A fund may purchase securities on a when-issued basis
in connection with the refinancing of an issuer's outstanding indebtedness.
Refunding contracts require the issuer to sell and the fund 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 fund generally will
not be obligated to pay the full purchase price if it fails to perform
under a refunding contract. Instead, refunding contracts generally provide
for payment of liquidated damages to the issuer (currently 15-20% of the
purchase price). A fund 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. When required by
SEC guidelines, a fund will place liquid assets in a segregated custodial
account equal in amount to its obligations under refunding contracts.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits 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. To protect the
fund from the risk that the original seller will not fulfill its
obligation, the securities are held in an account of the fund at a bank,
marked-to-market daily, and maintained at a value at least equal to the
sale price plus the accrued incremental amount. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility that the value of the underlying security
will be less than the resale price, as well as delays and costs to a fund
in connection with bankruptcy proceedings), it is each fund's current
policy to engage in repurchase agreement transactions with parties whose
creditworthiness has been reviewed and found satisfactory by FMR.
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, a fund 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, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security. However, in general, the money market fund anticipates
holding restricted securities to maturity or selling them in an exempt
transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of the fund's assets and may be
viewed as a form of leverage.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation
of the credit of a bank or another entity in determining whether to
purchase a security supported by a letter of credit guarantee, insurance,
or other source of credit or liquidity.
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. Each 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
support 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
marketable by the funds; and the possibility that the maturities of the
underlying securities may be different from those of the commitments.
TENDER OPTION BONDS are created by coupling an intermediate- or long-term,
fixed-rate, tax-exempt 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. New York Money Market may buy tender option bonds if the agreement
gives the fund the right to tender the bond to its sponsor no less
frequently than once every 397 days. In selecting tender option bonds
for the funds, 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 OR FLOATING RATE OBLIGATIONS, provide for periodic
adjustments of 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 have put features.
ZERO COUPON BONDS do not make regular interest payments. Instead, they are
sold at a deep 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 very volatile when interest rates change. In
calculating its daily dividend, a fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value.
THE FOLLOWING PARAGRAPH RESTATES FUNDAMENTAL POLICIES PREVIOUSLY DISCLOSED
IN THE ABOVE DESCRIPTIONS OF SECURITY TYPES AND INVESTMENT PRACTICES.
FUNDAMENTAL POLICIES: Under normal market conditions, New York Insured
will invest primarily in municipal bonds that, at the time of purchase,
either (1) are insured under fund insurance issued to the fund by an
insurer or (2) are insured under an insurance policy obtained by the issuer
or underwriter of such municipal bonds at the time of original issuance
thereof (issuer insurance). Insurance will cover the timely payment of
interest and principal on municipal obligations and will be obtained from
recognized insurers.
SPECIAL CONSIDERATIONS AFFECTING NEW YORK
The financial condition of the State of New York (the State), its public
authorities and public benefit corporations (the Authorities) and its local
governments, particularly t he City of New York (the City), could
affect the market values and marketability of, and therefore the net asset
value per share and the interest income of, the funds, or result in the
default of existing obligations, including obligations which may be held by
the funds. The following section provides only a brief summary of the
complex factors affecting the financial situation in New York and is based
on information obtained from the State, certain of its Authorities, the
City and certain other localities, as publicly available on the date of
this Statement of Additional Information. The information contained in such
publicly available documents has not been independently verified. It should
be noted that the creditworthiness of obligations issued by local issuers
may be unrelated to the creditworthiness of the State, and that there is no
obligation on the part of the State to make payment on such local
obligations in the event of default in the absence of a specific guarantee
or pledge provided by the State.
The State and the City are each facing serious financial difficulties
and have each experienced recent declines in their credit standings.
Standard & Poor's Corporation (S&P) and Moody's Investors Service Inc.
(Moody's) have each assigned ratings for the State's general obligation
bonds that are among the three lowest of those states with rated general
obligation bonds. The ratings of certain related debt of other issuers for
which the State has an outstanding moral obligation, lease purchase,
guarantee or other contractual obligation are generally linked directly to
the State's rating. S&P and Moody's have each assigned ratings for the
City's obligations that are among the lowest of those cities with rated
general obligation bonds. Should the financial condition of the State,
its Authorities, or its local governments deteriorate, their respective
credit ratings could be further reduced, and the market value and
marketability of their outstanding notes and bonds could be adversely
affected, and their respective access to the public credit markets
jeopardized.
ECONOMIC FACTORS. New York is the third most populous state, and has a
relatively high level of personal wealth. However, the State economy has
grown more slowly than that of the nation as a whole, resulting in the
gradual erosion of its relative economic affluence (due to factors such as
relative costs for taxes, labor, and energy). The State's economy is
diverse, with a comparatively large share of the nation's financial,
insurance, transportation, communications and service employment, and a
very small share of the nation's farming and mining activity. New York has
a declining proportion of its workforce engaged in manufacturing and
increasing proportion engaged in service industries. The State, therefore
is likely to be less affected than the nation as a whole during an economic
recession concentrated in construction and manufacturing sectors of the
economy, but is likely to be more affected during a recession concentrated
in the service-producing sector. The State's manufacturing and maritime
base have been seriously eroded, as illustrated by the decline of the steel
industry in the Buffalo area and of the apparel and textile industries in
the City. In addition, the City experienced substantial socio-economic
changes, as a large segment of its population and a significant share of
corporate headquarters and other businesses relocated (many out-of-state).
Both the State and the City experienced substantial revenue increases in
the mid-1980s attributable directly (corporate income and financial
corporations taxes) and indirectly (personal income and a variety of other
taxes) to growth in new jobs, rising profits, and capital appreciation
derived from the finance sector of the City's economy. From 1977 to its
1988 peak, the finance, insurance, and real estate sectors rose 55%, to
account in 1988 for 23% of total earnings in the City and 14% statewide
(compared to 7% nationwide). The finance sector's growth was a catalyst for
the New York metropolitan region's related business and professional
services, retail trade and residential and commercial real estate markets.
The then rising real estate market contributed to City revenues, as higher
property values and new construction added to collections from property
taxes, mortgage recording, and transfer taxes and sales taxes on building
materials. The boom on Wall Street more than compensated for the continued
erosion of the State's (and the City's) manufacturing and maritime base,
since average wages in finance and related business and professional
services were substantially higher (thereby providing a net increase of
higher incomes, taxed at even higher marginal rates).
Although the national economy began to expand in 1991, the State economy
remained in recession until 1993, when employment growth resumed.
Employment growth has been hindered during recent years by significant cut
backs in the computer and instrument manufacturing, utility and defense
industries. Personal income increased substantially in 1992 and 1993.
The State's economy entered into the third year of a slow recovery in
1995. According to assumptions contained in the State financial plan issued
on June 20, 1995 (the 1995-96 State Financial Plan) employment is expected
to grow slightly during 1995, although the rate of increase is expected to
be below the experience of the 1980's due to cutbacks in federal spending
and employment, as well as continued corporate downsizing. The Mid-Year
update to the 1995-96 State Financial Plan issued on October 25, 1995 (the
Mid Year Update) contains a marginally weaker economic forecast than that
contained in the initial 1995-96 State Financial Plan, and predicts a
significant slowing of state employment growth during calendar year 1996,
due to the forecasted slackening pace of national economic growth, industry
consolidation and governmental employment.
Notwithstanding the state budget for fiscal year 1995-1996 which
enacts significant tax and program reductions, the state can expect to
confront a structural deficit in future years. The 1995-96 State Financial
Plan, in part, reflects actions which provide non-recurring measures
(sometimes referred to as "one shots") variously estimated to provide $900
million to $1.0 billion of savings. Additionally, the three-year plan to
reduce State personal income taxes will decrease State tax receipts by an
estimated $1.7 billion in fiscal year 1996-97. Similarly, other actions
taken to reduce disbursements, such as reductions in the state work force
and Medicare and welfare expenditures, are expected to provide greater
reductions in future fiscal years. The net impact of these and other
factors is expected to produce a potential imbalance in receipts and
disbursements for the State's fiscal year 1996-97 and future fiscal years.
Further, there can be no assurance that the State economy will not
experience worse-than-predicted results in the 1995-96 Fiscal Year with
corresponding material and adverse effects on the State's projections of
receipts and disbursements. Although the Mid-Year Update (Third-quarter
Update) projects a continued balance in the 1995-96 State Financial Plan,
downward revisions have been made to the estimates of both receipts and
disbursements. As the State Financial Plan and the updates thereto are
based upon forecasts of national and State economic activity, it should be
noted that many uncertainties exist in such forecasts, including federal
financial and monetary policies, the availability of credit and the
condition of the world economy. In addition, the economic and financial
condition of the State may be affected by various financial, social,
economic and political factors. These factors can be complex, may vary from
year to year and are frequently the results of actions taken not only by
the State and its agencies and instrumentalities, but also by other
entities, such as the Federal government, that are not under the control of
the State.
The fiscal health of the State may also be impacted by the fiscal health of
the City. Although the City has had a balanced budget since 1981, estimates
of the City's future revenues and expenditures are subject to various
uncertainties. For example, the effects of the October 1987 stock market
crash and 1990-92 national recession have had a disproportionately adverse
impact on the New York city metropolitan region, as private sector job
losses since 1989 have offset all the prior employment gains of the 1980s.
Declines in both employment and earnings in the finance sector
contributed to declines in retail sales and real estate values. In
addition, a number of widely publicized bankruptcies among highly leveraged
retailing, brokerage and real estate development companies occurred. The
effects of the recession have extended to banking, insurance, business
services (such as law, accounting and advertising), publishing and
communications. Factors which may inhibit the City's economic recovery
include (i) credit restraints imposed by the weak financial condition of
several major money center banks located in the City; (ii) increases in
combined State and local tax burdens, if uncompetitive tax rates are
imposed; (iii) perceived declines in the quality of life attributable to
service reductions and the deterioration of the City's infrastructure; (iv)
additional employment losses in the City's banking sector or corporate
headquarters complex due to further corporate relocations or
restructurings; or (v) increased expenditures for public health assistance
and care. The City's future economic condition will also likely be affected
by its competitive position as a world financial center (compared to
London, Tokyo, Frankfurt, and competing regional U.S. centers). Investors
should also note that the budget for the City fiscal year 1995-96 addresses
a projected $2.7 billion budget gap. Most of the budget-cap closing
initiatives may be implemented only with the cooperation of the city's
municipal unions, or the state or Federal government. No assurance can be
given that such initiatives will be successfully undertaken.
While the State's economy is broader-based than that of the City,
particular industries are concentrated in and have a disproportionate
impact on certain areas, such as heavy industry in Buffalo, photographic
and optical equipment in Rochester, machinery and transportation equipment
in Syracuse and Utica-Rome, computers in Binghamton and in the Mid-Hudson
Valley, and electrical equipment in the Albany-Troy-Schenectedy area.
Constraints on economic growth, taxpayer resistance to proposed substantial
increases in local tax rates, and reductions in State aid in regions apart
from the City have contributed to financial difficulties for several county
and other local governments.
THE STATE. As noted above, the financial condition of the State is affected
by several factors, including the strength of the State and its regional
economies, actions of the federal government, and State actions affecting
the level of receipts and disbursements. Owing to these and other factors,
the State may, in future years, face substantial potential budget gaps
resulting from a significant disparity between tax revenues projected from
a lower recurring receipts base and the future costs of maintaining State
programs at current levels. The State has been experiencing and
continues to experience substantial financial difficulties, with
General Fund (the principal operating account) deficits incurred during the
fiscal years 1989-1990 through 1991-1992. The State's accumulated General
Fund deficit (on a GAAP basis) grew 91% from FY1986-87 to FY1990-91, and
reached a then-record $6.265 billion (audited) by March 31, 1991. An
accumulated General Fund deficit at March 31, 1993 was restated to be
$2.551 billion. The State ended its 1993-94 fiscal year with a negative
fund balance of $1.637 billion. This represented an improvement over prior
years, primarily due to an improving national and State economy resulting
in higher-than-expected receipts from personal income tax and various
business taxes and the relative success of the New York Local Government
Assistance Corporation (LGAC). The General Fund showed an operating surplus
of $914 million (on a GAAP basis). The State's 1994-95 fiscal year budget
was adopted on June 8, 1994, more than two months after the beginning of
the State's fiscal year. The State ended its FY 1994-95 reporting a General
Fund operating deficit of $1.426 billion, primarily due to changes in
accounting methodologies used by the State Comptroller and the use of
$1.026 billion of the FY 1993-94 cash surplus to fund operating expenses in
FY 1994-95. These factors were offset by net proceeds of $315 million of
bonds issued by LGAC. Actual receipts reported fell short of original
projections, primarily in the categories of business taxes. These
shortfalls were offset by better than expected performance in the remaining
taxes, principally the user taxes and fees. Total expenditures for FY
1994-95 increased $2.083 billion, or 6.7% over the prior fiscal year.
On June 7, 1995, the New York State legislature passed the final
legislation regarding the State's FY1995-96 budget. Both the enacted budget
bills and the State Financial Plan for FY1995-96 include the reductions in
the actual level of spending from that which occurred in FY 1994-95 and
project reductions in Medicaid and State Authority operating costs. The
FY1995-96 budget also projects an approximate increase of 3% in all
governmental funds over the amounts received in FY1994-95 and includes the
phase-in of a three-year reduction in the State's personal income tax. The
Governor released his proposed budget for FY1996-97 on December 15, 1995
(the "1996-97 Executive Budget") 30 days in advance of the
constitutionally-mandated release date. The 1996-97 Executive Budget
projects a $3.9 billion budget gap, which it proposes to close largely by
Medicaid cost containment measures, welfare reform and restructuring of the
state health care delivery system. The phased reduction of the State's
personal income tax is continued in the 1996-97 Executive Budget. There are
risks and uncertainties concerning whether or not certain tax and spending
cuts included in the FY1995-96 budget as adopted will be upheld if
challenged in the courts. For example, the State Comptroller is challenging
the proposed use of certain pension reserves. If such suit is successful,
approximately $110 million would become unavailable as a source of
contribution to the balanced State budget. Finding an additional $110
million in reductions or from other sources may prove difficult.
Additionally, even if all such tax and spending cuts are successfully
implemented, resulting in a balanced budget for FY1995-96, there can be no
assurance that the State will not face budget gaps in future years,
resulting from a disparity between tax revenues projected from a lower
recurring-receipts base and the spending required to maintain State
programs at current levels. Furthermore, the State is a party to numerous
lawsuits in which an adverse decision could require extraordinary
expenditures. Certain major budgetary considerations affecting the State
are outlined below.
REVENUE BASE. The State's principal revenue sources are economically
sensitive, and include the personal income tax 57 % of estimated
FY199 5 -9 6 General Fund tax receipts, and user taxes
and fees (20% of FY1994-95 and nearly 21% of estimated FY1995-96 General
Fund tax receipts, respectively) and uncertainties in tax pages
behavior as a result of actual and proposed changes in Federal tax law
also can have an adverse impact on State tax receipts. One-fourth of the 4%
State sales tax has been dedicated to pay debt service of the LGAC, and has
correspondingly reduced General Fund receipts. To the extent those
mon ie s are not necessary for payment to LGAC, they are transferred
from the LGAC Tax Fund to the General Fund and reported as a transfer from
other funds rather than as sales and use tax receipts. During fiscal years
1991-92, 1992-93 , 1993-94, and 1994-95 mon ie s were so
transferred. $1.3 billion is recommended to be transferred from the LGAC
Tax Fund to the General Fund in fiscal year 1994-95. Capital gains are a
significant component of income tax collections. Auto sales and building
materials are significant components of retail sales tax collections. Tax
rates are relatively high and may impose political and economic constraints
on the ability of the State to further increase its taxes. State
legislation enacted in 1995 is designed to reduce, by 20% over three
years, receipts from the personal income tax. This tax-reduction program is
estimated to reduce receipts by $515 million in FY1995-96, $2.2 billion in
FY1996-97 and to produce further significant reductions in FY1997-98. In
addition to such reductions in overall tax rates, the tax-reduction program
also includes other modifications to the tax laws which will have the
effect of lowering the amount of tax revenues to be received by the State.
In the absence of countervailing economic growth or expenditure cuts
the tax cuts could make the achievement of a balanced State budget more
difficult in future years.
A significant risk to the 1995-96 State Financial Plan arises from tax
legislation pending in the U.S. Congress. Changes to the federal tax
treatment of capital gains, if made, are likely to flow automatically to
the State personal income tax. Such changes, depending upon their precise
character and timing, as well as taxpayer response, could produce either
revenue gain or loss during the remainder of the State's 1995-96 fiscal
year.
STATE DEBT. The State has the heaviest debt burden of any state (with
nearly $5. 2 billion of long-term general obligation , $4.7 billion
of LGAC debt and $18 billion of lease-purchase or other contractual
debt outstanding as of March 31, 199 5 ), and debt service costs
absorb a large share of the State's budget. As of March 31, 199 5 the
State is also obligated with respect to nearly $7. 2 billion for
statutory moral obligations for nine of its Authorities and for guarantees
of $ 358 million of other Authority debt. Historically , the
State ha d one of the largest seasonal financing requirements of any
municipal issuer, and is required each spring to borrow substantial sums
from public credit markets to finance its accumulated General Fund deficit
and its scheduled payments of aid to local governments and school
districts. To reduce such seasonal borrowings, the state created
LGAC as a financing vehicle to finance the State's local assistance
payments by issuing long-term debt, payable over 30 years from a portion of
the State sales tax , as discussed above. As of June, 1995, LGAC had
issued its bonds and notes to provide net proceeds of $4.7 billion, thus
completing the LGAC program. The impact of LGAC's borrowing is that the
State was able to meet its cash flow needs in the first quarter of FY
1995-96 without relying on short-term seasonal borrowings. Neither the
1995-96 State Financial Plan nor the 1994-95 State Financial plan included
a spring borrowing, the first time in 35 years that there was no such
short-term borrowing. Investors should note that t he enabling
legislation for LGAC contains a covenant restricting the amount of the
S tate's S pring B orrowing, which may reduce the State's
fiscal flexibility in future fiscal years.
BUDGETARY FLEXIBILITY. A significant portion of the State's General Fund
budget is accounted for by contractually required expenses (such as pension
and debt service costs) and by federally mandated programs (such as AFDC
and Medicaid). In addition, State aid for school districts comprises a
major share of the budget, and total appropriations and distribution of
such aid is especially contentious politically. Furthermore, the State's
ability to respond to unanticipated developments in the future may have
been impaired since the State has utilized a substantial range of actions
of a non-recurring nature in recent years to finance its General Fund
operations, including tapping excess monies in special funds, refinancing
outstanding debt to reduce reserve fund requirements and current (but not
long-term) debt service costs, recalculating pension fund contributions,
selling State assets, reimbursing past General Fund expenditures by the
issuance of authority debt and deferring payment for expenditures to future
fiscal years. The 199 5 -9 6 State F inancial P lan
contain s actions of a non-recurring nature including mergers of
certain state authorities, payment from the sale of certain state assets
and payments associated with the resolution of certain court cases,
totalling approximately $900 million to $1 billion. The 1996-97 Executive
Budget, however, contains actions of a non-recurring nature only to the
extent of approximately $123 million.
LABOR COSTS. The State government workforce is mostly unionized, subject to
the Taylor Law which authorizes collective bargaining and prohibits (but
has not historically prevented) strikes and work slowdowns. Costs for
employee health benefits have increased substantially, and can be expected
to further increase. The State has a substantial unfunded liability for
future pension benefits, and has utilized changes in its pension fund
investment return assumptions to reduce current contribution requirements.
If such investment earnings assumptions are not sustained by actual
results, additional State contributions will be required in future years to
meet the State's contractual obligations. The State's change in actuarial
method from the aggregate cost method to a modified projected unit credit
method in the 1990-91 fiscal year created a substantial surplus that was
amortized and applied to offset the State's contribution through the
1993-94 fiscal year. This change in actuarial method was ruled
unconstitutional by the State's highest court and the State return ed
to the aggregate cost method in fiscal year 1994-95 using a four-year
phase-in. Employer contributions, including the State's, are expected to
increase over the next five to ten years.
PUBLIC ASSISTANCE. The State has the second largest number of persons
receiving public assistance (AFDC and Home Relief) of any state. AFDC costs
are shared among the federal government, the State and its counties
(including the City) by statutory formula. Caseloads tend to rise
significantly during economic downturns, but have fallen only in the later
stages of past economic recoveries.
MEDICAID. The State participates in the federal Medicaid program under a
state plan approved by the Health Care Financing Administration. The
federal government provides a substantial portion of eligible
program costs, with the remainder shared by the State and its counties
(including the City). Basic program eligibility and benefits are determined
by federal guidelines, but the State provides a number of optional benefits
and expanded eligibility. Program costs have increased substantially in
recent years, and account for a rising share of the State budget. Federal
law requires the State to adopt reimbursement rates for hospitals and
nursing homes that are reasonable and adequate to meet the costs that must
be incurred by efficiently and economically operated facilities in
providing patient care, a standard that has led to past litigation by
hospitals and nursing homes seeking higher reimbursement from the State.
The budget adopted for FY1995-96 and, in particular, the 1996-97
Executive Budget, each include reductions in spending for Medicaid.
Cutbacks in State spending for Medicaid may adversely affect the
financial condition of hospitals and health care institutions that are the
obligors of bonds that may be held by the funds.
THE STATE AUTHORITIES. The State's Authorities are not subject to the
constitutional restrictions on the incurrence of debt which apply to the
State itself, and may issue bonds and notes within the amounts of, and as
otherwise restricted by, their legislative authorization. The New York
State Public Authorities Control Board approves the issuance of debt and
major contracts by ten of the Authorities. As of September 30, 199 4 (the
date of the latest data available) , there were 18 Authorities that had
outstanding debt of $100 million or more, the aggregate debt of which
(including refunding bonds and moral obligation, lease-purchase,
contractual obligation, or State-guaranteed debt) then totaled
approximately $ 70.3 billion. As of March 31, 199 5 , aggregate
public authority debt outstanding as State-supported debt was $2 7.9
billion and State-related debt was $ 36.1 billion. In recent years
the State has provided financial assistance through appropriations, in some
cases of a recurring nature, to certain Authorities for operating and other
expenses and, (from 1976 to 1987) in fulfillment of its commitments on
moral obligation indebtedness or otherwise, for debt service. The State has
budgeted operating assistance of approximately $1.3 billion for the
Metropolitan Transportation Authority (MTA) for fiscal year 1994-95 and
estimates total assistance in FY1995-96 to be approximately $1.1
billion . This assistance is expected to continue to be required (and
may increase) in future years. Failure by the State to appropriate
necessary amounts or to take other action to permit the Authorities to meet
their obligations could adversely affect the ability of the State and the
Authorities to obtain financing in the public credit markets and the market
price of the State's outstanding bonds and notes.
The MTA, whose credit standing was recently reduced, oversees the operation
of the City's subway and bus lines by its affiliates, the New York City
Transit Authority and the Manhattan and Bronx Surface Transit Operating
Authority (collectively, the "TA"). MTA subsidiaries operate certain
commuter rail and bus lines in the New York metropolitan area. An
affiliated agency, the Triborough Bridge and Tunnel Authority (TBTA),
operates certain intrastate toll bridges and tunnels. To maintain its
facilities and equipment, which deteriorated significantly in the late
1970s due to deferred maintenance, the MTA prepares a five-year capital
program subject to approval by the MTA Capital Program Review Board. In
April 1993, the State legislature authorized the funding of a portion of a
five year $9.56 billion capital plan for the MTA for 1992 through 1996.
MTA's five year capital program for 1992-96 was approved by the State
capital program review board in December 1993. There can be no assurance
that all governmental actions for the 1992-96 capital program will be
taken, that funding sources currently identified will not be decreased or
eliminated, or that the capital program will not be delayed or reduced. If
the capital program is delayed or reduced, ridership and fare revenues may
decline, which could impair the MTA's ability to meet its operating
expenses without additional State assistance. There can be no assurance
that any such assistance will continue at any particular level or in any
fixed relationship to the operating costs and capital needs of the MTA.
THE CITY. In the early 1970s, the City incurred substantial operating
deficits, and its financial controls, accounting practices, and disclosure
policies were widely criticized. In 1975, the City encountered severe
financial difficulties and lost access to the public credit markets. The
State Legislature responded in 1975 by creating the Municipal Assistance
Corporation For The City of New York (MAC) to provide financing assistance
for the City and the Financial Control Board to exercise certain oversight
and review functions with respect to the City's finances. The Financial
Control Board's powers over the City were suspended in June 1986, but would
be reinstated (under current law) if the City experiences certain adverse
financial circumstances. At the time of the fiscal crisis, the State
provided substantial financial assistance to the City, the federal
government provided the City with direct seasonal loans and guarantees on
the City's long-term debt, and the City's labor unions accepted deferrals
of wage increases and approved purchases of City bonds by the pension
funds. No assurance can be given that similar assistance would again be
made available if needed, particularly given the current budgetary
constraints faced by both the federal and State governments.
The City provides services usually undertaken by counties, school districts
or special districts in other large urban areas, including the provision of
social services such as day care, foster care, health care, family
planning, services for the elderly and special employment services for
needy individuals and families who qualify for such assistance. State law
requires the City to allocate a large portion of its total budget to Board
of Education operations, and mandates the City to assume the local share of
public assistance and Medicaid costs. While the city has had GAAP operating
surpluses in recent years, the City has experienced ongoing financial
difficulties; primarily related to the impact of the recent recession on
the local economy (reducing revenues from most major taxes and increasing
public assistance and Medicaid caseloads), rising health care costs for
City employees and for Medicaid, and rising inflation and interest rates.
In response, the City implemented gap-closing programs which initially
relied primarily on actions of a non-recurring nature, but included
substantial property tax rate increases and a personal income tax surcharge
imposed in FY1991 and selected service cutbacks. Reductions in State aid,
larger-than-budgeted labor settlements and increased police expenditures
added to the adverse budgetary impact of the local recession, confronting
the City with a potential $3.3 billion imbalance during FY1992 budget
negotiations. This initial budget gap was closed by adoption of a budget
providing for various tax increases and significant service reductions. Aid
to nonprofit cultural institutions in the City was significantly reduced
(as was State aid to such institutions), including certain institutions
that are obligors of bonds that may be held by the funds.
The City's budget for fiscal year 1994 identified measures to close a $300
million budget gap, which was the result of shortfalls in federal and State
aid from previously projected levels. The City achieved balanced operating
results as reported in accordance with GAAP for the 1994 fiscal year.
For the 1995 fiscal year, the City adopted a budget which halted the
trend in recent years of substantial increases in City-funded spending from
one year to the next, and the City budget adopted for the 1996 fiscal year
reduced City-funded spending for a second consecutive year. The mayor
is responsible for preparing the City's four-year financial plan. The
City's 199 6 -199 9 financial plan (the 1996-1999 City
Financial Plan) contains numerous assumptions concerning factors which
may impact the City's budget such as: the timing and pace of a regional and
local economic recovery, increases in interest rates, the impact on real
estate tax revenues of the current downturn in the real estate market, wage
increases for city employees consistent with those assumed in the
F inancial P lan, employment growth, the ability to implement
proposed reductions in City personnel and other cost reduction initiatives
which may require in certain cases the cooperation of the City's municipal
unions and MAC, provision of State and federal aid and mandate relief, and
the impact on the New York City region of proposals for federal and
state welfare reform . No assurance can be given that the assumptions
used by the City in the 1996-1999 City Financial Plan will be
realized. Furthermore, actions taken in recent fiscal years to avert
deficits may have reduced the City's flexibility in responding to future
budgetary imbalances, and have deferred certain expenditures to later
fiscal years.
The City's original budget for fiscal year 1995 reflected proposed actions
to eliminate a $2.3 billion budget gap. The City submitted on July 21,
1995 a fourth quarter modification of the City's financial plan for
FY1994-95 which projects a balanced budget in accordance with GAAP for the
City's FY1994-95. On July 11, 1995, the City submitted the 1996-1999 City
Financial Plan, which is based on the City's expense and capital budgets
for the City's FY1995-96 adopted on June 14, 1995 (the "1996 City Budget").
The 1996 City Budget sets forth proposed actions by the City for FY1995-96
to close a substantial projected budget gap (approximately $3.1 billion)
resulting from lower than projected tax receipts and other revenues and
greater then projected expenditures. Proposed actions in the 1996-1999 City
Financial Plan for the City's FY1995-96 include a reduction of
approximately $400 million primarily affecting public assistance and
Medicaid payments by the City, expenditure reductions in agencies totalling
approximately $1.2 billion and transitional labor savings of approximately
$600 million. These and other proposed actions were contained in the
1996-1999 City Financial Plan as well as the 1996 City Budget. The Budget
is subject to the ability of the City to implement the reductions in
expenditures, personal services and personnel, which are substantial and
may be difficult to implement. For example, one of the key items contained
in the 1996 City Budget is the sale of the City's water system for
approximately $2.3 billion. This plan has been hotly contested since it was
announced, and is currently the focus of several lawsuits. In November, the
Mayor sued the City Comptroller to compel his signature on bonds needed to
accomplish the sale of the water system. The Comptroller had blocked the
bond sale, stating that the sale of City water assets would be illegal and
"an improvident fiscal gimmick." In December, a coalition of civic, housing
and environmental groups from New York City and Westchester County (the
"Coalition") filed suit to block the Mayor's plan to sell the Water System
and announced an intention to join in the Comptroller's battle to block the
bond sale. In addition, certain proposals may be offset by various State
and federal legislation which could mandate levels of City funding
inconsistent with the 1996 City Budget and the 1996-1999 City Financial
Plan. In addition, the 1996-1999 City Financial Plan anticipates the
receipt of substantial amounts of Federal aid. Certain proposed State and
federal actions are subject to legislative, the governor's and the
president's approvals, as applicable. Both federal and State actions are
uncertain, certain legislative proposals contemplate significant reductions
in federal spending, including proposed federal welfare reform which could
result in caps on, or block grants of, federal programs. Further, no
assurance can be given that either such actions will in fact be taken or
that the projected savings will result even if such actions are taken.
The City derives its revenues from a variety of local taxes, user charges,
miscellaneous revenues and federal and State unrestricted and categorical
grants. The City projects that local revenues will provide approximately
6 8 % of total revenues in fiscal year 199 6 while federal aid,
including categorical grants, will provide 1 1.7 % in fiscal year 1996
and State aid, including unrestricted aid and categorical grants, will
provide 2 0.3 % in fiscal year 199 6 . As a proportion of total
revenues, State aid has remained relatively constant over the period from
1980 to 1990, while federal aid was sharply reduced (having provided nearly
20% of total fiscal year 1980 revenues). The largest source of the City's
revenues is the real estate tax (approximately 22% of total revenues
projected for fiscal year 199 6 ), at rates levied by the City
council (subject to certain State constitutional limits). State legislation
requires that increases in assessments of certain classes of real property
be phased-in over a five-year period; thus, property owners may receive
higher assessments when property values are declining. However, in the
event of a reduction in total assessments, higher tax rates would be
required to maintain the same amount of tax revenue. The City derives the
remainder of its tax revenues from a variety of other economically
sensitive local taxes (subject to authorization by the legislature),
including: a local sales and compensating use tax (primarily dedicated to
MAC debt service) imposed in addition to the State's tax; the personal
income tax on City residents and the earnings tax on non-residents; a
general corporation tax; and a financial corporation tax. High tax burdens
in the City impose political and economic constraints on the ability of the
City to increase local tax rates. The City's financial plans have been the
subject of extensive public comment and criticism, principally questioning
the reasonableness of assumptions that the City will have the capacity to
generate sufficient revenues in the future to provide the level of services
contained in the City's financial plans. On July 10, 1995, S&P lowered
the City's credit rating from A- to BBB+, among the lowest ratings of any
major city in the country. The rating openly cited specifically the City
budget's reliance on non-recurring measures to balance the budget for
fiscal 1996 without rectifying the underlying structural problems, its
continued optimistic projections of State and federal aid, and continued
high debt levels.
The City is the largest municipal debt issuer in the nation, and has more
than doubled its debt load since the end of FY1988, in large measure to
rehabilitate its extensive, aging physical plant. The City's seasonal
borrowing needs increased significantly during FY1990 and FY1991, largely
due to delayed State aid payments, and totalled $2.25 billion in FY1992,
$1.4 billion in FY1993 , $1.75 billion in FY1994 , and $2.2 billion
in FY1995 . The City's current capital financing program reflects major
reductions in the City's four-year capital plan, which will reduce future
debt service requirements, but may adversely affect the condition of its
deteriorating physical plant. Further, the City's capital financing
program currently contemplates receipt of proceeds of approximately $1
billion resulting from the sale of the City's water system to the Water
Board, and proposes to utilize a substantial portion of such proceeds for
capital project improvements. It is not certain that such proceeds will
become available for capital improvements because, as discussed above, both
the City Comptroller and the coalition have opposed such proposed transfer
of the City's water system.
In November 1993, the voters approved a proposed charter whereby Staten
Island would secede from the City. Staten Island is one of five
counties/boroughs, comprising 4% of the City's population and 19% of its
land area. State law provides a complex mechanism for such secession. The
State Legislature is also considering establishment of a similar secession
mechanism for Queens.
OTHER LOCALITIES. Certain localities in addition to the City could have
financial problems which, if significant, could lead to requests for
additional State assistance during the State's 199 5 -9 6 fiscal
year and thereafter. Fiscal difficulties experienced by the City of
Yonkers, for example, could result in State actions to allocate State
resources in amounts that cannot yet be determined. In the recent past, the
State provided substantial financial assistance to its political
subdivisions, primarily for aid to elementary, secondary and higher
education , medicaid and income maintenance and local
transportation program. The legislature enacted substantial reductions
from previously budgeted levels of State aid since December 1990. To the
extent the State is constrained by its financial condition, State
assistance to localities may be further reduced, compounding the serious
fiscal constraints already experienced by many local governments.
Localities also face anticipated and potential problems resulting from
pending litigation (including challenges to local property tax
assessments), judicial decisions and socio-economic trends.
In 1992, the total indebtedness of all localities in the State, other than
New York City, was approximately $15.7 billion. A small portion
(approximately $71.6 million) of this indebtedness represented borrowing to
finance budgetary deficits issued pursuant to enabling State legislation
(requiring budgetary review by the State Comptroller ) . Subsequently,
certain counties and other local governments have encountered significant
financial difficulties, including the counties of Suffolk, Nassau, Monroe,
and Westchester, and the city of Buffalo. The State has imposed financial
control on New York City from 1977 to 1986 and on the City of Yonkers since
1984 under an appointed control board in response to fiscal crises
encountered by such municipalities. The Legislature imposed certain limited
fiscal restraints on Nassau and Suffolk Counties, and authorized their
issuance of deficit bonds to finance over several years their respective
1992 operating deficits.
SPECIAL CONSIDERATIONS AFFECTING PUERTO RICO
The following highlights some of the more significant financial trends and
problems affecting the Commonwealth of Puerto Rico (the Commonwealth or
Puerto Rico) and is based on information drawn from official statements and
prospectuses relating to the securities offerings of Puerto Rico, its
agencies and instrumentalities, available as of the date of this SAI. FMR
has not independently verified any of the information contained in such
official statements, prospectuses, and other publicly available documents,
but it is not aware of any fact which would render such information
materially inaccurate.
The economy of Puerto Rico is closely integrated with that of the United
States. In fiscal 1994, trade with the United States accounted for
approximately 87% of Puerto Rico's exports and approximately 67% of its
imports. In this regard, Puerto Rico experienced a $4.3 billion positive
adjusted merchandise trade balance in fiscal 1994.
Since fiscal 1985, personal income, both aggregate and per capita, have
increased consistently each fiscal year. In fiscal 1994, aggregate personal
income was $25.7 billion and personal income per capita was $7,047. Gross
domestic product in fiscal year 1991, 1992, 1993, 1994, and 1995 was $22.8
billion, $23.7 billion, $25.2 billion, $26.6 billion, and $28.3 billion,
respectively. For fiscal 1996, an increase in gross product of 2.7% over
fiscal 1995 is forecasted. However, actual growth in the Puerto Rico
economy will depend on several factors, including the state of the U.S.
economy, the exchange rate for the U.S. dollar, increases in exports and
visitors to the Commonwealth, the price stability of oil imports, the level
of federal transfers, and the cost of borrowing. Due to uncertainties with
respect to these factors, there is no assurance that the economy of Puerto
Rico will continue to grow.
Puerto Rico's economy continued to expand throughout the five year period
from fiscal 1990 through fiscal 1994. While trends in the Puerto Rico
economy generally follow those of the United States, Puerto Rico did not
experience a recession in 1991. This was primarily because of low oil
prices, low interest rates, and Puerto Rico's strong manufacturing base,
which has a large component of non-cyclical industries. Other factors in
the continued expansion included Commonwealth-sponsored economic
development programs, stable prices of oil imports, low exchange rates for
the U.S. dollar, the level of federal transfers, and the relatively low
cost of borrowing funds during that period.
Puerto Rico has made marked improvements in fighting unemployment.
Nonetheless, although unemployment is at relatively low historical levels
for the Commonwealth, it remains above the U.S. average. The unemployment
rate declined from 16.0% to 13.8% from fiscal 1994 to fiscal 1995. As of
October 1995, the unemployment rate stood at 15.0%. Despite this relative
downturn, there is a possibility that the unemployment rate will increase
if there are changes in factors that directly impact the economy of Puerto
Rico.
The economy of Puerto Rico has undergone a transformation in the later half
of this century from one centered around agriculture to one dominated by
the manufacturing and service industries. Manufacturing is the cornerstone
of Puerto Rico's economy and accounted for $16.3 billion or 61.2% of gross
domestic product in fiscal 1994. However, manufacturing has experienced a
basic change over the years as a result of the influx of higher wage, high
technology industries such as pharmaceuticals, electronics, computers,
microprocessors, scientific instruments, and high technology machinery. The
service sector, which includes wholesale and retail trade, finance and real
estate, ranks second in its contribution to gross domestic product and is
the economic sector that employs the greatest number of people. In fiscal
1994, the service sector generated $15 billion in gross domestic product
and employed over 478,000 people. The government sector of the Commonwealth
also plays an important role in the economy of the island. In fiscal 1994,
the government accounted for $4.1 billion of Puerto Rico's gross domestic
product and provided 22.2% of total employment. Tourism also contributed
significantly to the island economy and total visitor expenditures amounted
to $1.8 billion in fiscal 1995.
Much of the development of the manufacturing sector of the economy of
Puerto Rico is attributable to federal and Commonwealth tax incentives,
most notably section 936 of the Internal Revenue Code of 1986, as amended
(Section 936), and the Commonwealth's Industrial Incentives Program.
Section 936 currently grants U.S. corporations that meet certain criteria
and elect its application a credit (the Section 936 credit) against their
U.S. corporate income tax on the portion of the tax attributable to (i)
income derived from the active conduct of a trade or business in Puerto
Rico (active business income) or from the sale or exchange of substantially
all of the assets used in the active conduct of such trade or business and
(ii) qualified possession source investment income. The Industrial
Incentives Program, through the 1987 Industrial Incentives Act, grants
corporations engaged in certain qualified activities a fixed 90% exemption
from Commonwealth income and property taxes and a 60% exemption from
municipal license taxes.
Pursuant to amendments to the Internal Revenue Code (the Code) for taxable
years commencing after 1993, two alternative limitations apply to the
Section 936 credit against active business income and sale of assets
income, as previously described. The first option limits the credit against
such income to 40% of the credit allowable previous to the amendments of
1993, with a five-year phase-in period starting at 60% of the current
allowable credit (the Percentage Limitation). The second option limits the
allowable credit to the sum of (i) 60% of qualified compensation paid to
employees (as defined in the Code), (ii) a specified percentage of
depreciation deductions, and (iii) a portion of the Puerto Rico income
taxes paid by the Section 936 corporation, up to a 9% effective tax rate
(the Economic Activity Limitation).
On November 17, 1995, the U.S. Congress adopted, as part of its larger
federal income tax legislative package, a ten-year phase-out of the current
Section 936 credit for companies that are existing credit claimants and the
elimination of the credit for companies establishing new operations in
Puerto Rico and for existing companies that add a substantial new line of
business. The Section 936 credit based on the Economic Activity Limitation
will continue as under current law without change until tax years beginning
in 2002, during which years a corporation's possession business income will
be subject to a cap based on its possession income for an average adjusted
base period. The credit based on the Percentage Limitation will continue as
under current law until tax years beginning in 1998. In that year and
thereafter, the credit based on the Percentage Limitation will be 40%, but
the possession business income will be subject to a cap based on a
corporation's possession income for an average adjusted base period. The
Section 936 credit is eliminated entirely for taxable years beginning in
2006. However, the credit granted to qualified possession source investment
income is eliminated for taxable years beginning after December 31, 1995.
President Clinton vetoed the legislation submitted by the U.S. Congress on
December 7, 1995. The Administration has proposed a modification to the
Section 936 credit that would phase out the credit based on the Percentage
Limitation over a five year period beginning in 1997, retain the credit
based upon the Economic Activity Limitation under current law, allow a
five-year carry forward of excess Section 936 credit based upon the
Economic Activity Limitation, and retain the Section 936 credit granted to
qualified possession source investment income under current law.
The Governor of Puerto Rico has proposed to the U.S. Congress a
modification of the total elimination of the Section 936 credit by offering
qualifying companies the option of the existing Section 936 credit, as
amended by the U.S. House of Representatives proposal, or a new incentive
program, to be available throughout the United States, including Puerto
Rico. The proposal would provide such companies a credit based on
qualifying wages paid, other wage-related expenses such as fringe benefits,
depreciation expenses for certain tangible assets, research and development
expenses, and passive investment income from qualifying investments in the
subject jurisdiction, so long as the company's employees are in an
"economically developing" jurisdiction in which prevailing per capita
income is substantially below the national average, among other things. The
credit granted to qualifying companies would continue in effect until the
jurisdiction shows, among other things, substantial economic improvement in
terms of the specified economic parameters. The Governor's proposal is not
currently included in either the legislation adopted by the U.S. Congress
on November 17, 1995 or in the Administration's proposal. It is not
possible at this time to determine the final legislative changes that may
be made to Section 936 or the effect that this will have on the long-term
outlook for the economy of Puerto Rico.
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 fund's
management contract. In the case of the money market, FMR has granted
investment management authority to the sub-adviser (see the section
entitled "Management Contracts"), and the 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 below. FMR is also responsible
for the placement of transaction orders for other investment companies and
accounts for which it or its affiliates act as investment adviser.
Securities purchased and sold by the money market fund generally will be
traded on a net basis (i.e., without commission). 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; and
the reasonableness of any commissions.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other 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 accounts; effect securities transactions, and perform
functions incidental thereto (such as clearance and settlement). FMR
maintains a listing of broker-dealers who provide such services on a
regular basis. However, as many transactions on behalf of the money market
fund are placed with broker-dealers (including broker-dealers on the list)
without regard to the furnishing of such services, it is not possible to
estimate the proportion of such transactions directed to such
broker-dealers solely because such services were provided. The selection of
such broker-dealers generally is made by FMR (to the extent possible
consistent with execution considerations) based upon the quality of
research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds 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 the funds. 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.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive 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
each 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 the funds and 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.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds, or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI), a subsidiary of FMR Corp., if the commissions are fair,
reasonable, and comparable to commissions charged by non-affiliated,
qualified brokerage firms for similar services.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
For the fiscal years ended January 31, 1996 and 1995, the portfolio
turnover rates wer e 74% and 41%, respectively, for New York Insured
an d 83% and 34%, re spectively, for New York Income.
For fiscal 1996, 1995, and 1994, the funds paid no brokerage
commissions.
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, investment decisions for each fund
are made independently from those of other funds managed by FMR or 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 accounts.
Simultaneous transactions are inevitable when several funds and 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
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 OF PORTFOLIO SECURITIES
BOND FUNDS. Valuations of portfolio securities furnished by the
pricing service employed by the bond funds are based upon a computerized
matrix system or appraisals by the pricing service, in each case in
reliance upon information concerning market transactions and quotations
from recognized municipal securities dealers. The methods used by the
pricing service and the quality of valuations so established are reviewed
by officers of the fund and FSC under the general supervision of the Board
of Trustees. There are a number of pricing services available, and the
Trustees, or officers acting on behalf of the Trustees, on the basis of
on-going evaluation of these services, may use other pricing services or
discontinue the use of any pricing service in whole or in part. Futures
contracts and options are valued in the basis of market quotations if
available.
MONEY MARKET FUND. The fund values its investments on the basis of
amortized cost. This technique involves valuing an instrument at its cost
as adjusted for amortization of premium or accretion of discount rather
than its value based on current market quotations or appropriate
substitutes which reflect current market conditions. The amortized cost
value of an instrument may be higher or lower than the price the fund would
receive if it sold the instrument.
Valuing the fund's instruments on the basis of amortized cost and use of
the term "money market fund" are permitted by Rule 2a-7 under the 1940 Act.
The fund must adhere to certain conditions under Rule 2a-7.
The Board of Trustees of the trust oversees FMR's adherence to SEC rules
concerning money market funds, and has established procedures designed to
stabilize the fund's NAV at $1.00. At such intervals as they deem
appropriate, the Trustees consider the extent to which NAV calculated by
using market valuations would deviate from $1.00 per share. If the Trustees
believe that a deviation from the 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.
During periods of declining interest rates, the fund's yield based on
amortized cost may be higher than the yield based on market valuations.
Under these circumstances, a shareholder in the fund would be able to
obtain a somewhat higher yield than would result if the fund utilized
market valuations to determine its NAV. The converse would apply in a
period of rising interest rates.
PERFORMANCE
The funds 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. A bond fund's share price, and each
fund's yield and total 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. To compute the money market fund's yield 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. The
money market fund also may calculate a compound effective yield by
compounding the base period return over a one-year period. In addition to
the current yield, the money market fund may quote yields in advertising
based on any historical seven-day period. Yields for the money market fund
are calculated on the same basis as other money market funds, as required
by regulation.
For the bond funds, yields are computed by dividing each fund's interest
income for a given 30-day or one-month period, net of expenses, by the
average number of shares entitled to receive dividends during the period,
dividing this figure by the fund's net asset value per share (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 the bond fund's 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 determining the bond funds' 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 bond 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 a fund's performance and in
providing a basis for comparison with other investment alternatives.
However, each 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 the 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 the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
A fund's tax-equivalent yield is the rate an investor would have to earn
from a fully taxable investment before taxes to equal the fund's tax-free
yield. Tax-equivalent yields are calculated by dividing a fund's yield by
the result of one minus a stated federal or combined federal and state and
city 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 1996. The
s econd 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 3% to 8%. Of
course, no assurance can be given that a fund will achieve any specific
tax-exempt yield. While the funds invest principally in obligations whose
interest is exempt from federal and state income tax, other income received
by the funds 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 1996.
1996 TAX RATES

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Marginal Tax Rate Combined

New York Combined
Marginal Federal New York New York State and New York
Taxable Income Income State and Federal State, City
Effective and Federal

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Single Return* Joint Return* Tax Bracket State City Tax Bracket** Tax Bracket**

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
24,001 - 25,000 40,101 - 45,000 28% 7.13% 11.53% 33.13% 36.29%

25,001 - 58,150 45,001 - 96,900 28% 7.13% 11.53% 33.13% 36.30%

58,151 - 60,000 96,901 - 108,000 31% 7.13% 11.53% 35.92% 38.95%

60,001 - 121,300 108,001 - 147,700 31% 7.13% 11.58% 35.92% 38.99%

121,301 - 263,750 147,701 - 263,750 36% 7.13% 11.58% 40.56% 43.41%

263,751 + above 263,751 + above 39.6% 7.13% 11.58% 43.90% 46.60%

</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 appropriate table
below to determine the tax-equivalent yield for a given tax-free yield.
NEW YORK CITY RESIDENTS - TRIPLE TAXES - 1996
If your effective combined federal, state, and New York City personal
income tax rate in 1996 is:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
36.29% 36.30% 38.95% 38.99% 43.41% 46.60 %

</TABLE>

<TABLE>
<CAPTION>
<S> <C>
To match these

tax-free yields: Your taxable investment would have to earn the following yield:

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
3% 4.71% 4.71% 4.91% 4.92% 5.30% 5.62%

4% 6.28% 6.28% 6.55% 6.56% 7.07% 7.49%

5% 7.85% 7.85% 8.19% 8.20% 8.84% 9.36%

6% 9.42% 9.42% 9.83% 9.83% 10.60% 11.24%

7% 10.99% 10.99% 11.47% 11.47% 12.37% 13.11%

8% 12.56% 12.56% 13.10% 13.11% 14.14% 14.98%

</TABLE>

NEW YORK STATE RESIDENTS (OUTSIDE NYC) - DOUBLE TAXES - 1996
I f your effective combined federal and state personal income tax rate in
1996 is:
33. 13 % 3 5.92 % 40. 56 % 4 3.90 %

To match these
tax-free yields: Your taxable investment would have to earn the following
yield:
3% 4.49% 4.68% 5.05% 5.35%

4% 5.98% 6.24% 6.73% 7.13%

5% 7.48% 7.80% 8.41% 8.91%

6% 8.97% 9.36% 10.09% 10.70%

7% 10.47% 10.92% 11.78% 12.48%

8% 11.96% 12.48% 13.46% 14.26%

Each 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.
TOTAL RETURN CALCULATIONS. Total 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 the fund 's NAV
over a stated period. Average annual total 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 total return of 100% over ten years would
produce an average annual total 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 annua l total re turns 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 total returns represent averaged figures as opposed to
the actual year-to-year performance of the fund.
In addition to average annual total returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
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. Total 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 total return. Total returns may be quoted on a
before-tax or after-tax basis. Total 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 net asset values,
adjusted net asset values, and benchmark indices 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 FUND RESULTS. The following tables show the money market
fund's 7-day yield, the bond funds' 30-day yields, and each fund's
tax-equivalent yields and total returns for periods ended January 31,
1996.
The tax-equivalent yield is based on a combined effective federal state and
N ew York City income tax rate of 43.41% and reflec ts that, as of
January 31, 1 996, none of t he 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.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thirty/
Sev Tax- One Five Ten One Five Ten
en-Day Equival
ent Year Years Years Year Years Years
Yield Yield

New York 2.80% 4.95% 3.32 % 2.74 % 3.67 % 3.32 % 14.49 % 43.40 %
Money Market

New York 4.33% 7.65% 15.25 % 8.40 % 7.74 % 15.25 % 49.67 % 110.84 %
Insured

New York 4.62% 8.16% 16.29 % 8.79 % 8.09 % 16.29 % 52.39 % 117.65 %
Income

</TABLE>

The following table shows the income and capital elements of each fund's
cumulative total return. The table compares each fund's return to the
record of the Standard & Poor's Composite Index of 500 Stocks (S&P 500),
the Dow Jones Industrial Average (DJIA), and the cost of living (measured
by the Consumer Price Index, or CPI) over the same period. The CPI
information is as of the month end closest to the initial investment date
for each fund. The S&P 500 and DJIA comparisons are provided to show how
each fund's total return compared to the record of a broad average of
common stocks and a narrower set of stocks of major indus trial
companies, respectively, over the same period. Of course, since the money
market fund invests in short-term and the bond funds invest 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 a fixed-income investment such as the funds. Figures for
the S&P 500 and DJIA are based on the prices of unmanaged groups of stocks
and, unlike the funds' returns, do not include the effect of paying
brokerage commissions or other costs of investing.
During the ten year period ended January 31, 1996, a hypothetical $10,000
investment in New York Money Market would have grown to $14,340, assuming
all distributions were reinvested. This was a period of fluctuating
interest rates and bond prices and the figures below should not be
considered representative of the dividend income or capital gain or loss
that could be realized from an investment in the fund today.
NEW YORK MONEY MARKET INDICES

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended Value of Value of Value of Total S&P 500 DJIA Cost of
Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions

1996 $ 10,000 $ 4,340 $ 0 $ 14,340 $ 41,187 $ 47,268 $ 14,106

1995 $ 10,000 $ 3,879 $ 0 $ 13,879 $ 29,702 $ 32,877 $ 13,714

1994 $ 10,000 $ 3,549 $ 0 $ 13,549 $ 29,547 $ 33,115 $ 13,339

1993 $ 10,000 $ 3,305 $ 0 $ 13,305 $ 26,177 $ 26,787 $ 13,011

1992 $ 10,000 $ 2,995 $ 0 $ 12,995 $ 23,667 $ 25,325 $ 12,600

1991 $ 10,000 $ 2,525 $ 0 $ 12,525 $ 19,287 $ 20,813 $ 12,281

1990 $ 10,000 $ 1,925 $ 0 $ 11,925 $ 17,796 $ 18,957 $ 11,624

1989 $ 10,000 $ 1,305 $ 0 $ 11,305 $ 15,547 $ 16,512 $ 11,049

1988 $ 10,000 $ 806 $ 0 $ 10,806 $ 12,946 $ 13,319 $ 10,557

1987 $ 10,000 $ 402 $ 0 $ 10,402 $ 13,392 $ 14,228 $ 10,146

</TABLE>

1996 $ 11,082 $ 9,246 $ 756 $ 21,084 $ 41,187 $ 47,268 $ 14,106

1995 $ 10,103 $ 7,511 $ 680 $ 18,294 $ 29,702 $ 32,877 $ 13,714

1994 $ 11,474 $ 7,395 $ 486 $ 19,355 $ 29,547 $ 33,115 $ 13,339

1993 $ 11,035 $ 6,179 $ 11 $ 17,225 $ 26,177 $ 26,787 $ 13,011

1992 $ 10,616 $ 5,000 $ 10 $ 15,626 $ 23,667 $ 25,325 $ 12,600

1991 $ 10,177 $ 3,901 $ 10 $ 14,088 $ 19,287 $ 20,813 $ 12,281

1990 $ 10,047 $ 2,978 $ 10 $ 13,035 $ 17,796 $ 18,957 $ 11,624

1989 $ 10,009 $ 2,158 $ 10 $ 12,177 $ 15,547 $ 16,512 $ 11,049

1988 $ 9,944 $ 1,379 $ 10 $ 11,333 $ 12,946 $ 13,319 $ 10,557

1987 $ 10,704 $ 700 $ 10 $ 11,414 $ 13,392 $ 14,228 $ 10,146

</TABLE>

1996 $ 10,636 $ 9,803 $ 1,326 $ 21,765 $ 41,187 $ 47,268 $ 14,106

1995 $ 9,644 $ 7,881 $ 1,191 $ 18,716 $ 29,702 $ 32,877 $ 13,714

1994 $ 11,069 $ 7,843 $ 952 $ 19,865 $ 29,547 $ 33,115 $ 13,339

1993 $ 10,738 $ 6,620 $ 267 $ 17,625 $ 26,177 $ 26,787 $ 13,011

1992 $ 10,271 $ 5,312 $ 256 $ 15,838 $ 23,667 $ 25,325 $ 12,600

1991 $ 9,881 $ 4,155 $ 246 $ 14,282 $ 19,287 $ 20,813 $ 12,281

1990 $ 9,881 $ 3,207 $ 246 $ 13,334 $ 17,796 $ 18,957 $ 11,624

1989 $ 9,856 $ 2,315 $ 245 $ 12,416 $ 15,547 $ 16,512 $ 11,049

1988 $ 9,746 $ 1,468 $ 243 $ 11,456 $ 12,946 $ 13,319 $ 10,557

1987 $ 10,594 $ 750 $ 161 $ 11,505 $ 13,392 $ 14,228 $ 10,146

</TABLE>

Explanatory Notes: With an initial investment of $10,000 made on
February 1, 1986, 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
$20,616. 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 $6,433 for dividends
and $829 for capital gains distributions. Tax consequences of different
investments have not been factored into the above figures.
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 Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. Lipper may also rank funds 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 indices
prepared by Lipper or other organizations. The bond funds may be
compared to the Lehman Brothers Municipal Bond Index, a total return
performance benchmark for the long-term, investment-grade tax-exempt bond
market. Issues included in the index have a minimum credit rating of Baa
and a maturity of at least one year. Subsequent to December 31, 1995, zero
coupon bonds and issues subject to the alternative minimum tax are included
in the index. New York Insured Municipal Income and New York Municipal
Income may also be compared to the Lehman Brothers New York Insured
Municipal Bond Index and the Lehman Brothers New York 4 Plus Year Municipal
Bond Index, respectively. The Lehman Brothers New York Insured Municipal
Bond Index includes insured New York investment-grade municipal bonds in
the Lehman Brothers Municipal Bond Index. The Lehman Brothers New York 4
Plus Year Municipal Bond Index includes New York Investment-grade municipal
bonds in the Lehman Brothers Municipal Bond Index with maturities of four
years or greater. When comparing these indices, 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, the 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 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 indices.
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 total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND AVERAGES(trademark)/New York
Tax-Free Funds Category, which is reported in the MONEY FUND
REPORT(registered trademark), covers over 392 New York tax-free
money market funds. The Bond Fund Report AverageS(trademark)/All Tax-Free,
which is reported in the BOND FUND REPORT(registered trademark), covers
over 565 tax-free bond funds. When evaluating comparisons to money
market funds, investors should consider the relevant differences in
investment objectives and policies. Specifically, money market funds invest
in short-term, high-quality instruments and seek to maintain a stable $1.00
share price . Bond funds, however, invests in longer-term instruments and
its share price changes daily in response to a variety of factors.
A fund may compare and contrast in advertising the relative advantages of
investing in a mutual fund versus an individual municipal bond. Unlike
tax-free 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 initial investment requirements and sales charges of many
tax-free mutual funds are lower than the purchase cost of individual
municipal bonds, which are generally issued in $5,000 denominations and are
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; charitable giving; and the Fidelity credit
card. 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,
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 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 total 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 fund
may also discuss or illustrate examples of interest rate sensitivity.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
A 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, 19 96, FMR advised over $26.5 billion in tax-free fund
assets, $81 billion in money market fund assets, $251 billion in equity
fund assets, $54 billion in international fund assets, and $23 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, each 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 AND REDEMPTION INFORMATION
Each fund is open for business and its net asset value per share (NAV)
is calculated each day the New York Stock Exchange (NYSE) is open for
trading. The NYSE has designated the following holiday closings for 1996:
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day, and Christmas Day. Although FMR expects
the same holiday schedule to be observed in the future, the NYSE may modify
its holiday schedule at any time. In addition, the funds will not process
wire purchases and redemptions on days when the Federal Reserve Wire System
is closed.
FSC normally determines each bond fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). FSC normally calculates the money market
fund's NAV twice each business day, once at 12:00 noon Eastern time and
once as of the close 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). To the
extent that portfolio securities are traded in other markets on days when
the NYSE is closed, a fund's NAV may be affected on days when investors do
not have access to the fund to purchase or redeem shares. In addition,
trading in some of a fund's portfolio securities may not occur on days when
the fund is open for business.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving 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.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940
Act), each fund is required to give shareholders at least 60 days' notice
prior to terminating or modifying its exchange privilege. Under the Rule,
the 60-day notification requirement may be waived if (i) the only effect of
a modification would be to reduce or eliminate an administrative fee,
redemption fee, or deferred sales charge ordinarily payable at the time of
an exchange, or (ii) the fund suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
In the Prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. To the extent that each fund's income is designated as federally
tax-exempt interest, the daily dividends declared by the fund are also
federally tax-exempt. Short-term capital gains are distributed as dividend
income, but do not qualify for the dividends-received deduction. These
gains will be taxed as ordinary income. Each fund will send each
shareholder a notice in January describing the tax status of dividend and
capital gain distributions (if any) for the prior year.
Shareholders are required to report tax-exempt income on their federal tax
returns. Shareholders who earn other income, such as Social Security
benefits, may be subject to federal income tax on up to 85% of such
benefits to the extent that their income, including tax-exempt income,
exceeds certain base amounts.
Each fund purchases municipal securities that are free from federal
income tax based on opinions of counsel regarding their tax status. These
opinions generally will be based on covenants by the issuers or other
parties regarding continuing compliance with federal tax requirements. If
at any time the covenants are not complied with, distribution to
shareholders of interest on a security could become federally taxable
retroactive to the date the security was issued. For certain types of
structure securities, opinions of counsel may also be based on the effect
of the structure on the federal and state tax treatment of the income.
As a result of the Tax Reform Act of 1986, 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 will be
considered tax-exempt for purposes of each fund's policies of investing so
that at least 80% of its income is free from federal income tax. 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. Private activity securities issued after August 7,
1986 to benefit a private or industrial user or to finance a private
facility are affected by this rule.
A portion of the gain on bonds purchased with market discount after April
30, 1993 and short-term capital gains distributed by each fund are taxable
to shareholders as dividends, not as capital gains. Dividend distributions
resulting from a recharacterization of gain from the sale of bonds
purchased with market discount after April 30, 1993 are not considered
income for purposes of each fund's policy of investing so that at least 80%
of its income is free from federal income tax. New York Money Market
ma y distribute any net realized short-term capital gains and taxable
market discount once a year or more often, as necessary, to maintain its
net asset value at $1.00 per share.
Corporate investors should note that a tax preference item for purposes
of the corporate AMT is 75% of the amount by which adjusted current
earnings (which includes tax-exempt interest) exceeds the alternative
minimum taxable income of the corporation. If a shareholder receives an
exempt-interest dividend and sells shares at a loss after holding them for
a period of six months or less, the loss will be disallowed to the extent
of the amount of exempt-interest dividend.
NEW YORK TAX MATTERS. It is not expected that a fund will incur New
York income or franchise tax liability. New York personal income tax law
provides that exempt-interest dividends paid by a regulated investment
company, or series thereof, from interest on obligations which are exempt
from tax under New York law are excludable from gross income.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by each fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of a fund, and such shares are held six
months or less and are sold at a loss, the portion of the loss equal to the
amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes. Short-term capital gains distributed by
each fund are taxable to shareholders as dividends, not as capital gains.
The money market fund does not anticipate distributing long-term capital
gains.
As of January 31, 19 96, New York Money Market had a capital loss
carryforward aggregating approximately $40,600. Th is loss
carryforward, of which $37,600 and $3,000 will expire on January 31,
2001 and 2004, r espectively, is available to offset future capital
gains.
As of January 31, 19 96, New York Insured had a capital loss
carryforward aggregating approximately $ 2,577,000 . This loss
carryforward, which will expire on January 31, 2004, is available
to offset future capital gains.
As of January 31, 1996, New York Income had a capital loss carryforward
aggregating approximately $5,669,000. This loss carryforward, whi ch
will expire on January 31, 2004, i s available to offset future
capital gains.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes 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. Each bond fund intends to comply with other tax
rules applicable to regulated investment companies, including a requirement
that capital gains from the sale of securities held less than three months
constitute less than 30% of the fund's gross income for each fiscal year.
Gains from some futures contracts, and options are included in this 30%
calculation, which may limit a fund's investments in such instruments.
New York Money Market is treated as a separate entity from the other
funds of Fidelity New York Municipal Trust II and New York Insured and New
York Income are treated as separate entities from other funds of Fidelity
New York Municipal Trust for tax purposes.
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. 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.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. 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 Investment Company Act of 1940 (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 three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
Fidelity Investments Institutional Operations Company, which performs
shareholder servicing functions for institutional customers and funds sold
through intermediaries; and 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
account 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.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust s are listed below.
Except as indicated, each individual has held the office shown or other
offices in the same company for the last five years. Trustees and officers
elected or appointed to Fidelity New York Municipal Trust II prior
to the money market fund's conversion from a series of a Massachusetts
business trust served in identical capacities. All persons named as
Trustees also serve in similar capacities for other funds advised by
FMR . The business address of each Trustee and officer who is an
"interested person" (as defined in the Investment Company Act of 1940) 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
Tru stees who are "interested persons" by virtue of their affiliation
with either a trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (65), 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
FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (53), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (63), Trustee (1991), is a consultant to Western Mining
Corporation (1994). Prior to February 1994, he was President of Greenhill
Petroleum Corporation (petroleum exploration and production, 1990). Until
March 1990, Mr. Cox was President and Chief Operating Officer of Union
Pacific Resources Company (exploration and production). He is a Director of
Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University and
the University of Texas at Austin.
PHYLLIS BURKE DAVIS (64), Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton Corporation (manufacturing, 1991),
and the TJX Companies, Inc. (retail stores, 1990), and previously served as
a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In
addition, she is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
RICHARD J. FLYNN (72), Trustee, is a financial consultant. Prior to
September 1986, Mr. Flynn was Vice Chairman and a Director of the Norton
Company (manufacturer of industrial devices). He is currently a Trustee of
College of the Holy Cross and Old Sturbridge Village, Inc., and he
previously served as a Director of Mechanics Bank (1971-1995).
E. BRADLEY JONES (68), Trustee (1990). Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is
a Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc. (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990),
and he previously served as a Director of NACCO Industries, Inc. (mining
and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc.
(1985-1995). In addition, he serves as a Trustee of First Union Real Estate
Investments, a Trustee and member of the Executive Committee of the
Cleveland Clinic Foundation, a Trustee and member of the Executive
Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
DONALD J. KIRK (63), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. 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 is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Chairman of the Board of Directors of the National
Arts Stabilization Fund, Vice Chairman of the Board of Trustees of the
Greenwich Hospital Association, and as a Member of the Public Oversight
Board of the American Institute of Certified Public Accountants' SEC
Practice Section (1995).
*PETER S. LYNCH (53), Trustee (1990) is Vice Chairman and Director of FMR
(1992). 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). He is a Director of W.R. Grace
& Co. (chemicals) and Morrison Knudsen Corporation (engineering and
construction). 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 (1990).
GERALD C. McDONOUGH (66), Trustee, is Chairman of G.M. Management Group
(strategic advisory services). Prior to his retirement in July 1988, he was
Chairman and Chief Executive Officer of Leaseway Transportation Corp.
(physical distribution services). Mr. McDonough is a Director of
ACME-Cleveland Corp. (metal working, telecommunications and electronic
products), Brush-Wellman Inc. (metal refining), York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp. (water
treatment equipment, 1992), and Associated Estates Realty Corporation (a
real estate investment trust, 1993).
EDWARD H. MALONE (71), Trustee. Prior to his retirement in 1985, Mr. Malone
was Chairman, General Electric Investment Corporation and a Vice President
of General Electric Company. He is a Director of Allegheny Power Systems,
Inc. (electric utility), General Re Corporation (reinsurance) and Mattel
Inc. (toy manufacturer). In addition, he serves as a Trustee of the Naples
Philharmonic Center for the Arts, and Rensselaer Polytechnic Institute, and
he is a member of the Advisory Boards of Butler Capital Corporation Funds
and Warburg, Pincus Partnership Funds.
MARVIN L. MANN (62), Trustee (1993) is Chairman of the Board, President,
and Chief Executive Officer of Lexmark International, Inc. (office
machines, 1991). 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) and Infomart (marketing
services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign
Vice Chairman of the Tri-State United Way (1993) and is a member of the
University of Alabama President's Cabinet (1990).
THOMAS R. WILLIAMS (67), 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 BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
FRED L. HENNING, JR. (56), Vice President, is Vice President of Fidelity's
money market (1994) and fixed-income (1995) funds and Senior Vice President
of FMR Texas Inc.
JANICE BRADBURN (44) is Vice President of the money market fund (1992) and
other funds managed by FMR.
NORMAN LIND (39) is Vice President of New York Insured (1994) and New York
Income (1994) and other funds managed by FMR.
ARTHUR S. LORING (48), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (48), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995).
THOMAS D. MAHER (50), Assistant Vice President (1990), is Assistant Vice
President of Fidelity's money market funds and Vice President and Associate
General Counsel of FMR Texas Inc. (1990). Prior to 1990, Mr. Maher was an
employee of FMR.
JOHN H. COSTELLO (49), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (50), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994); Chief Financial
Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice
President, Assistant Controller, and Director of the Accounting Department
- - First Boston Corp. (1986-1990).
The following table sets forth information describing the compensation of
each current trustee of each fund for his or her services as trustee for
the fiscal year ended January 31, 1996.
COMPENSATION TABLE
Aggregate Compensation

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J. Gary Ralph F. Phyllis Richard Edward C. E. Donald Peter S. Gerald C. Edward Marvin L. Thomas
Burkhead** Cox Burke J. Flynn Johnson 3d** Bradley J. Kirk Lynch** McDonough H. Mann R.
Davis Jones Malone Williams

New
York $

0 $ 311 $308 $ 389 $ 0 $311 $ 315 $ 0 $ 308 $311 $311 $ 304
Money Marke t

New
York 0 132 131 165 0 132 134 0 131 132 132 129
Insured

New
York 0 169 167 211 0 169 171 0 167 169 169 165
Income

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees Pension or Estimated Annual Total
Retirement Benefits Upon Compensation
Benefits Accrued Retirement from the from the Fund
as Part of Fund Fund Complex* Complex*
Expenses from the
Fund Complex*

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

Ralph F. Cox 5,200 52,000 128,000

Phyllis Burke Davis 5,200 52,000 125,000

Richard J. Flynn 0 52,000 160,500

Edward C. Johnson 3d** 0 0 0

E. Bradley Jones 5,200 49,400 128,000

Donald J. Kirk 5,200 52,000 129,500

Peter S. Lynch** 0 0 0

Gerald C. McDonough 5,200 52,000 128,000

Edward H. Malone 5,200 44,200 128,000

Marvin L. Mann 5,200 52,000 128,000

Thomas R. Williams 5,200 52,000 125,000

</TABLE>

* Information is as of December 31, 1995 for 219 funds in the
complex.
** Interested trustees of the fund are compensated by FMR.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of Trustees' 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 the fund to retain the services of
any Trustee or to pay any particular level of compensation to the Trustee.
Each fund may invest in such designated securities under the Plan without
shareholder approval.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments is not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former
non-interested Trustees, receive retirement benefits under the program.
On January 31, 1996, the Trustees and officers of each fund owned, in
the aggregate, less than 1% of each fund's total outstanding shares.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under 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 each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund and all Trustees who are "interested
persons" of the trusts 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 and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
In addition to the management fee payable to FMR and the fees payable to
UMB , each fund pays all of its expenses, without limitation, 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. Although each
fund's current management contract provides that each fund will pay for
typesetting, printing, and mailing prospectuses, statements of additional
information, notices, and reports to shareholders, the trust, on behalf of
each fund has entered into a revised transfer agent agreement with UMB,
pursuant to which UMB bears the costs of providing these services to
existing shareholders. Other expenses paid by each fund include interest,
taxes, brokerage commissions, and each fund's proportionate share of
insurance premiums and Investment Company Institute dues. Each fund is also
liable for such non-recurring expenses as may arise, including costs of any
litigation to which each fund may be a party, and any obligation it may
have to indemnify its officers and Trustees with respect to litigation.
FMR is the bond funds' manager pursuant to management contracts dated
February 1, 1994, which were approved by shareholders on January 19, 1994.
FMR is also the money market fund's manager pursuant to a management
contract dated December 30, 1991. This contract was approved by Fidelity
New York Municipal Trust as sole shareholder of the trust on December 30,
1991 in conjunction with an Agreement and Plan of Conversion to convert the
fund from a series of a Massachusetts business trust to a series of a
Delaware Trust. The Agreement and Plan of Conversion was approved by public
shareholders of the fund on October 23, 1991. Besides reflecting the fund's
redomiciling, the December 30, 1991 contract is identical to the fund's
prior management contract with FMR, which was approved by shareholders of
the fund on November 28, 1988.
For the services of FMR under the contract, each fund pays FMR a monthly
management fee composed of the sum of two elements: 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 and
is calculated on a cumulative basis pursuant to the graduated fee rate
schedule shown below on the left. The schedule below 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 $375 billion of group net assets
- - the approximate level for January 1996 - was .1476%, which is the
weighted average of the respective fee rates for each level of group net
assets up to $375 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

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

0 - $3 billion .3700% $ 0.5 billion .3700%

3 - 6 .3400 25 .2664

6 - 9 .3100 50 .2188

9 - 12 .2800 75 .1986

12 - 15 .2500 100 .1869

15 - 18 .2200 125 .1793

18 - 21 .2000 150 .1736

21 - 24 .1900 175 .1695

24 - 30 .1800 200 .1658

30 - 36 .1750 225 .1629

36 - 42 .1700 250 .1604

42 - 48 .1650 275 .1583

48 - 66 .1600 300 .1565

66 - 84 .1550 325 .1548

84 - 120 .1500 350 .1533

120 - 174 .1450 400 .1507

174 - 228 .1400

228 - 282 .1375

282 - 336 .1350

Over 336 .1325

Prior to January 1, 1992, under each fund's management contract with FMR,
the group fee rate is based on a schedule with breakpoints ending at .1500%
for average group assets in excess of $84 billion. The money market fund's
management contract dated December 30, 1991 includes these group fee
breakpoints. The group fee rate breakpoints shown above for average group
assets in excess of $120 billion and under $228 billion were voluntarily
adopted by FMR on January 1, 1992. The additional breakpoints shown above
for average group assets in excess of $228 billion were voluntarily adopted
by FMR on November 1, 1993 pending shareholder approval. The amended
contracts approved by shareholders of the bond funds on January 19, 1994
reflect these extended fee rate schedules. Shareholders of the money market
fund have not yet approved an amended contract reflecting these extended
schedules.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints for average group assets
in excess of $156 billion, and under $372 billion as shown in the schedule
below. The revised group fee rate schedule was identical to the above
schedule for average group assets under $156 billion.
On January 1, 1996, FMR voluntarily added new breakpoints to the revised
schedule for average group assets in excess of $372 billion, pending
shareholders approval of a new management contract reflecting the revised
schedule and additional breakpoints. The revised group fee rate schedule
and its extensions provide for lower management fee rates as FMR's assets
under management increase. For average group assets in excess of $156
billion, the revised group fee rate schedule with additional breakpoints
voluntarily adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

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

120 - $156 billion .1450% $ 150 billion .1736%

156 - 192 .1400 175 .1690

192 - 228 .1350 200 .1652

228 - 264 .1300 225 .1618

264 - 300 .1275 250 .1587

300 - 336 .1250 275 .1560

336 - 372 .1225 300 .1536

372 - 408 .1200 325 .1514

408 - 444 .1175 350 .1494

444 - 480 .1150 375 .1476

480 - 516 .1125 400 .1459

Over 516 .1100 425 .1443

450 .1427

475 .1413

500 .1399

525 .1385

550 .1372

Each fund's individual fund fee rate is .25%. Based on the average group
net assets of the funds advised by FMR for January 1996, t he annual
management fee rate would be calculated as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management Fee Rate

.1476% + .25% = .3976%

</TABLE>

One-twelfth of this annual management fee rate is applied to each fund's
net assets averaged for the most recent month, giving a dollar amount,
which is the fee for that month.
The table below shows the management fees paid to FMR by each fund for
the fiscal years ended January 31, 1996, 1995, and 1994:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1996 1995 1994

New York Money Market $3,049,495 $2,765,682 $2,339,153

New York Insured 1,307,050 1,414,193 1,638,218

New York Income 1,683,089 1,719,636 1,981,659

</TABLE>

FMR may, from time to time, voluntarily reimburse all or a portion of
each fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). 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 each fund's total returns and yield and repayment of
the reimbursement by each fund will lower its total returns and yield.
SUB-ADVISER. On behalf of the money market fund, FMR has entered
into a sub-advisory agreement with FTX pursuant to which FTX has primary
responsibility for providing portfolio investment management services to
the fund.
Under the sub-advisory agreement, dated December 31, 1991, which was
approved by shareholders on October 23, 1991, FMR pays FTX fees equal to
50% of the management fee payable to FMR under its management contract with
the fund. The fees paid to FTX are not reduced by any voluntary or
mandatory expense reimbursements that may be in effect from time to time.
On behalf of the money market fund, for fiscal 1996, 199 5, and 1994,
FM R paid FTX fees of $1,524,748, $ 1,341,147 and $1,129,044,
respectively.
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved Distribution and Service Plans on behalf of the
funds (the Plans) pursuant to Rule 12b-1 under the Investment Company Act
of 1940 (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 a 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 funds to FMR is
deemed to be indirect financing by the funds of the distribution of their
shares, such payment is authorized by the Plans. Each Plan also
specifically recognizes that FMR, either directly or through FDC, may use
its management fee revenue, past profits, or other resources, without
limitation, to pay promotional and administrative expenses in connection
with the offer and sale of shares of each fund. In addition, each Plan
provides that FMR may use its resources, including its management fee
revenues, to make payments to third parties that assist in selling shares
of each fund, or to third parties, including banks, that render shareholder
support services.
Payments made by FMR to third parties during the fiscal year e nded
January 31, 1996 amounted to $90,854 for New York Money Market, $3,057 for
New York Insured, and $2,417 for New York Income.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
the fund and its shareholders. In particular, the Trustees noted that the
Plans do not authorize payments by a 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 shares of each fund, additional sales of fund shares 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 Plan was approved by shareholders of New York Insured and New York
Income, respectively on November 28, 1986. New York Money Market's Plan was
approved by shareholders, in connection with a reorganization transaction
on December 30, 1991, pursuant to an Agreement and Plan of Conversion.
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 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.
CONTRACTS WITH FMR AFFILIATES
UMB Bank, n.a. (UMB) is each f und's custodian and transfer agent.
UMB has entered into sub-contracts with FSC, an affiliate of FMR, under the
terms of which FSC performs the processing activities associated with
providing transfer agent and shareholder servicing functions for each fund.
Under the sub-contracts, FSC bears the expense of typesetting, printing,
and mailing prospectuses, statements of additional information, and all
other reports, notices, and statements to shareholders, with the exception
of proxy statements. FSC also pays all out-of-pocket expenses associated
with transfer agent services.
Under this arrangement, FSC receives annual account fees and asset-based
fees based on account size and fund type for each retail account and for
certain institutional accounts. With respect to certain institutional
retirement accounts, FSC receives annual account fees and asset based fees
based on account type or type of fund. These annual account fees are
subject to increase based on postal rate changes. FSC also collects small
account fees from certain accounts with balances of less than $2,500.
UMB has an additional sub-contract with FSC, pursuant to which FSC performs
the calculations necessary to determine each fund's net asset value per
share and dividends and maintains each fund's accounting records. The
annual fee rates for these pricing and bookkeeping services are based on
each fund's average net assets, and are presented in the table below.
Pricing and Bookkeeping Annual Fee Rates

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
$0 - $500 Greater Than Minimum Maximum
Million $500 Million Per Year Per Year

New York Money Market .0175% .0075% $ 40,000 $ 800,000

New York Insured .0400% .0200% 60,000 800,000

New York Income .0400% .0200% 60,000 800,000

</TABLE>

Pricing and bookkeeping fees, including reimbursement for out-of-pocket
expenses, paid to FSC for the fiscal years ended January 31, 1996, 1995,
and 1994 are indicated in the table below.
Pricing and Bookkeeping Fees

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1996 1995 1994

New York Money Market $ 129,311 $ 120,897 $ 107,954

New York Insured 143,619 149,305 174,688

New York Income 180,315 181,774 208,438

</TABLE>

The pricing and bookkeeping fees described above are paid to FSC by UMB,
which is entitled to reimbursement from the funds for these expenses.
FSC has entered into an agreement with Fidelity Brokerage Services, Inc.
(FBSI), a subsidiary of FMR Corp., pursuant to which FBSI performs certain
recordkeeping, communication, and other services for money market fund
shareholders participating in the Fidelity Ultra Service Account program.
FBSI directly charges a monthly administrative fee to each Ultra Service
Account client that chooses certain additional feature which is in addition
to the transfer agency fee received by FSC.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreement calls
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered at net asset value. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
DESCRIPTION OF THE TRUSTS
TRUSTS' ORGANIZATION. F idelity New York Insured Municipal Income Fund
(formerly Fidelity New York Insured Tax-Free Portfolio) and Fidelity New
York Municipal Income Fund (formerly Fidelity New York Tax-Free High Yield
Portfolio) are funds of Fidelity New York Municipal Tru st (the
Massachusetts trust), an open-end, management investment company organized
as a Massachusetts business trust on April 25, 1983. On January 8, 1990,
the trust's name was changed from Fidelity New York Tax-Free Fund to
Fidelity New York Municipal Trust. Currently, there are four funds of
the Massachusetts trust: Fidelity New York Municipal Income Fund; Fidelity
New York Insured Municipal Income Fund; Spartan New York Intermediate
Municipal Fund; and Spartan New York Municipal Income Fund. The
Massachusetts trust's Declaration of Trust permits the Trustees to create
additional funds.
Fidelity New York Municipal Money Market Fund (formerly Fidelity New York
Tax-Free Money Market Portfolio) is a fund of Fidelity New York
Municipal Trust II (the Delaware Trust), an open-end management investment
company organized as a Delaware business trust on June 20, 1991. Currently,
there are two funds of the Delaware Trust: Fidelity New York Municipal
Money Market Fund and Spartan New York Municipal Money Market Fund.
Fidelity New York Municipal Money Market Portfolio entered into an
agreement to acquire all of the assets of Fidelity New York Tax-Free Money
Market Portfolio, a series of Fidelity New York Municipal Trust (a
Massachusetts business trust) on December 30, 1991. Spartan New York
Municipal Money Market Portfolio entered into an agreement to acquire all
of the assets of Spartan New York Municipal Money Market Portfolio, a
series of Fidelity New York Municipal Trust (a Massachusetts business
trust) an March 22, 1994. The Delaware trust's Trust Instrument permits the
Trustees to create additional funds.
In the event that FMR ceases to be investment adviser to a trust or any of
its funds, the right of the trust or the fund to use the identifying names
"Fidelity" and "Spartan" may be withdrawn. There is a remote possibility
that one fund might become liable for ant misstatement in its prospectus or
statement of additional information about another fund.
The assets of each trust received for the issue or sale of shares of each
of its funds and all income, earnings, profits, and proceeds thereof,
subject only to the rights of creditors, are especially allocated to such
fund, and constitute the underlying assets of such fund. The underlying
assets of each fund are segregated on the books of account, and are to be
charged with the liabilities with respect to such fund and with a share of
the general expenses of their respective trusts. Expenses with respect to
the trusts are to be allocated in proportion to the asset value of their
respective funds, except where allocations of direct expense can otherwise
be fairly made. The officers of the trusts, subject to the general
supervision of the Boards of Trustees, have the power to determine which
expenses are allocable to a given fund, or which are general or allocable
to all of the funds of a certain trust. In the event of the dissolution or
liquidation of a trust, shareholders of each fund of that trust are
entitled to receive as a class the underlying assets of such fund available
for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY - MASSACHUSETTS TRUST. The Massachusetts
trust is an entity of the type commonly known as "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. The Declaration of Trust provides that the Massachusetts 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 Massachusetts trust or its
Trustees shall include a provision limiting the obligations created thereby
to the Massachusetts trust and its assets. The Declaration of Trust
provides for indemnification out of each fund's property of any
shareholders held personally liable for the obligations of the fund. 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 the 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.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
SHAREHOLDER AND TRUSTEE LIABILITY - DELAWARE TRUST. The Delaware trust is a
business trust organized under Delaware law. Delaware law provides that
shareholders shall be entitled to the same limitations of personal
liability extended to stockholders of private corporations for profit. The
courts of some states, however, may decline to apply Delaware law on this
point. The Trust Instrument contains an express disclaimer of shareholder
liability for the debts, liabilities, obligations, and expenses of the
Delaware trust and requires that a disclaimer be given in each contract
entered into or executed by the Delaware trust or its Trustees. The Trust
Instrument provides for indemnification out of each fund's property of any
shareholder or former shareholder held personally liable for the
obligations of the fund. The Trust Instrument 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
Delaware law does not apply, no contractual limitation of liability was in
effect, and the fund is unable to meet its obligations. FMR believes that,
in view of the above, the risk of personal liability to shareholders is
extremely remote.
The Trust Instrument further provides that the Trustees shall not be
personally liable to any person other than the Delaware trust or its
shareholders; moreover, the Trustees shall not be liable for any conduct
whatsoever, provided that Trustees are not protected against any liability
to which they would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties involved
in the conduct of their office.
VOTING RIGHTS - BOTH TRUSTS. Each fund's capital consists of shares of
beneficial interest. As a shareholder of New York Insured and New York
Income, you receive one vote for each dollar value of net asset value
you own. The shares have no preemptive or conversion rights; voting and
dividend rights, the right of redemption, and the privilege of exchange are
described in the Prospectus. Shares are fully paid and nonassessable,
except as set forth under the respective "Shareholder and Trustee
Liability" headings above. Shareholders representing 10% or more of a trust
or one of its funds may, as set forth in the Declaration of Trust or Trust
Instrument, call meetings of the trust or fund for any purpose related to
the trust or fund, as the case may be, including, in the case of a meeting
of an entire trust, the purpose on voting on removal of one or more
Trustees.
A trust or any fund may be terminated upon the sale of its assets to (or,
in the case of the Delaware trust and its funds, merger with) another
open-end management investment company or series thereof, or upon
liquidation and distribution of its assets. Generally such terminations
must be approved by vote of the holders of a majority of the outstanding
shares of the trust or the fund, (for the Delaware trust), or by a vote of
the holders of a majority of the trust or the fund, as determined by the
current value of each shareholder's investment in the fund or trust (for
the Massachusetts trust); however, the Trustees of the Delaware trust may,
without prior shareholder approval, change the form of the organization of
the Delaware trust by merger, consolidation, or incorporation. If not so
terminated or reorganized, the trusts and their funds will continue
indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder vote,
cause the Delaware trust to merge or consolidate into one or more trusts,
partnerships, or corporations, so long as the surviving entity is an
open-end management investment company that will succeed to or assume the
Delaware trust registration statement, or cause the Delaware trust to be
incorporated under Delaware law. Each fund of Fidelity New York Municipal
Trust may also invest all of its assets in another investment company.
CUSTODIAN. UMB Bank n.a.,1010 Grand Avenue, Kansas City, Missouri, is
custodian of the assets of the fund. The custodian is responsible for the
safekeeping of a fund's assets and the appointment of the subcustodian
banks and clearing agencies. The custodian takes no part in determining the
investment policies of a fund or in deciding which securities are purchased
or sold by a fund. However, a fund may invest in obligations of the
custodian and may purchase securities from or sell securities to the
custodian. The Bank of New York and Chemical Bank, each headquartered in
New York, also may serve as a special purpose custodian of certain assets
in connection with pooled repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and 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. Price Waterhouse LLP, 160 Federal Street, Boston, Massachusetts
serves as each trust's independent accountant. 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, 1996 are included in the fund's Annual Report, which
is a separate report supplied with this Statement of Additional
Information. Each fund's financial statements and financial highlights are
incorporated herein by reference.
APPENDIX
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value of
each investment by the number of days 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 its 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.
The descriptions that follow are examples of eligible ratings for the
funds. A fund may, however, consider the ratings for other types of
investments and the ratings assigned by other rating organizations when
determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S RATINGS OF STATE AND
MUNICIPAL NOTES:
Moody's ratings for state and municipal and other short-term obligations
will be designated Moody's Investment Grade (MIG, or VMIG for variable rate
obligations). This distinction is in recognition of the difference between
short-term credit risk and long-term credit risk. Factors affecting the
liquidity of the borrower and short-term cyclical elements are critical in
short-term ratings, while other factors of major importance in bond risk,
long-term secular trends for example, may be less important in the short
run. Symbols used will be as follows:
MIG-1/VMIG-1 - This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity support, or
demonstrated broad-based access to the market for refinancing.
MIG-2/VMIG-2 - This designation denotes high quality. Margins of protection
are ample although not so large as in the preceding group.
MIG-3/VMIG-3 - This designation denotes favorable quality. All security
elements are accounted for, but there is lacking the undeniable strength of
the preceding grades. Liquidity and cash flow protection may be narrow and
market access for refinancing is likely to be less well established.
MIG-4/VMIG-4 - This designation denotes adequate quality. Protection
commonly regarded as required of an investment security is present and,
although not distinctly or predominantly speculative, there is specific
risk.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF STATE AND MUNICIPAL NOTES:
SP-1 - Strong capacity to pay principal and interest. An issue determined
to possess a very strong capacity to pay debt service is given a plus (+)
designation.
SP-2 - Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of
the notes.
SP-3 - Speculative capacity to pay principal and interest.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S MUNICIPAL BOND RATINGS:
AAA - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
AA - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than the Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
BAA - Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
CAA - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
CA - Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have
other marked short-comings.
C - Bonds which are rated C are the lowest-rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
There are nine basic rating categories for long-term obligations. They
range from AAA (highest quality) to C (lowest quality). Those bonds within
the AA, A, BAA, BA and B categories that Moody's believes possess the
strongest credit attributes within those categories are designated by the
symbols AA1, A1, BAA1, BA1 and B1.
DESCRIPTION OF STANDARD & POOR'S MUNICIPAL BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
BB - Debt rate BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
The BB rating category is also used for debt subordinated to senior debt
that is assigned an actual or implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual
or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal.
In the event of adverse business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and repay principal. The
CCC rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied B or B- rating.
The ratings from AA to CCC may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
SPARTAN NEW YORK MUNICIPAL FUNDS:
SPARTAN NEW YORK MUNICIPAL MONEY MARKET FUND
SPARTAN NEW YORK INTERMEDIATE MUNICIPAL INCOME FUND
SPARTAN NEW YORK MUNICIPAL INCOME FUND

CROSS REFERENCE SHEET
FORM N-1A

ITEM NUMBER PROSPECTUS SECTION

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. Cover Page

2 a .............................. Expenses

b, c .............................. Contents; The Funds at a Glance; Who May Want
to Invest

3 a .............................. Financial Highlights

b .............................. *

c,d .............................. Performance

4 a i............................. Charter

ii........................... The Funds at a Glance; Investment Principles and
Risks

b .............................. *

c .............................. Who May Want to Invest; Investment Principles
and Risks

5 a .............................. Cover Page; The funds at a glance; Charter

b i............................. Cover Page; The funds at glance; Doing Business
with Fidelity; Charter

ii........................... Charter

iii.......................... Expenses; Breakdown of Expenses

c .............................. Charter;

d .............................. Charter; Breakdown of Expenses

e .............................. FMR and its Affiliates

f .............................. Expenses

g i............................. Charter

ii............................ *
.

5 A .............................. Performance

6 a i............................. Charter

ii........................... How to Buy Shares; How to Sell Shares;
Transaction Details; Exchange Restrictions

iii.......................... *

b ............................. *

c .............................. Transaction Details; Exchange Restrictions

d .............................. *

e .............................. Doing Business with Fidelity; How to Buy Shares;
How to Sell Shares; Investor Services

f, g .............................. Dividends, Capital Gains, and Taxes

7 a .............................. Charter; Cover Page

b .............................. How to Buy Shares; Transaction Details

c .............................. *

d .............................. How to Buy Shares

e .............................. *

f .............................. Breakdown of Expenses

8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions

9 .............................. *

</TABLE>

* Not Applicable

CROSS REFERENCE SHEET
(CONTINUED)
FORM N-1A

ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION

<TABLE>
<CAPTION>
<S> <C> <C> <C>
10, 11 ............................ Cover Page

12 ............................ Description of the Trusts

13 a - c ............................ Investment Policies and Limitations

d ............................ Portfolio Transactions

14 a - c ............................ Trustees and Officers

15 a, b ............................ *

c ............................ Trustees and Officers

16 a i ............................ FMR

ii ............................ Trustees and Officers

iii ............................ Management Contracts

b ............................ Management Contracts

c, d ............................ Contracts with FMR Affiliates

e ............................ *

f ............................ Distribution and Service Plans

g ............................ *

h ............................ Description of the Trusts

i ............................ Contracts with FMR Affiliates

17 a ............................ Portfolio Transactions

b ............................ Portfolio Transactions

c ............................ Portfolio Transactions

d, e ............................ *

18 a ............................ Description of the Trusts

b ............................ *

19 a ............................ Additional Purchase and Redemption Information

b ............................ Additional Purchase and Redemption Information;
Valuation of Portfolio Securities

c ............................ *

20 Distributions and Taxes

21 a, b ............................ Contracts with FMR Affiliates

c ............................ *

22 a, b ............................ Performance

23 ............................ Financial Statements

</TABLE>

* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy
of the funds' most recent financial reports and portfolio listing, or a
copy of the Statement of Additional Information (SAI) dated March 23, 1996.
The SAI has been filed with the Securities and Exchange Commission (SEC)
and is incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, call Fidelity at
1-800-544-8888.
Investments in the money market fund are neither insured nor guaranteed by
the U.S. government, and there can be no assurance that the fund will
maintain a stable $1.00 share price.
Mutual fund shares are not deposits or obligations of, or guaranteed by,
any depository institution. Shares are not insured by the FDIC, Federal
Reserve Board, or any other agency, and are subject to investment risks,
including possible loss of principal amount invested.

Each of these funds seeks a high level of current income free from federal
income tax and New York State and City income taxes. The funds have
different strategies, however, and carry varying degrees of risk and yield
potential.
SPARTAN(REGISTERED TRADEMARK)
NEW YORK
MUNICIPAL
FUNDS
LIKE ALL MUTUAL
FUNDS, THESE
SECURITIES HAVE NOT
BEEN APPROVED OR
DISAPPROVED BY THE
SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION, NOR HAS
THE SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION PASSED
UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO
THE CONTRARY IS A
CRIMINAL OFFENSE.
SNR-pro-396
SPARTAN NEW YORK
MUNICIPAL MONEY MARKET FUND
SPARTAN NEW YORK
INTERMEDIATE MUNICIPAL
INCOME FUND
SPARTAN NEW YORK
MUNICIPAL INCOME FUND
PROSPECTUS
MARCH 23, 1996(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
CONTENTS

KEY FACTS THE FUNDS AT A GLANCE

WHO MAY WANT TO INVEST

EXPENSES Each fund's yearly
operating expenses.

FINANCIAL HIGHLIGHTS A summary
of each fund's financial data.

PERFORMANCE How each fund has
done over time.

THE FUNDS IN DETAIL CHARTER How each fund is
organized.

INVESTMENT PRINCIPLES AND RISKS
Each fund's overall approach to
investing.

BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.

YOUR ACCOUNT DOING BUSINESS WITH FIDELITY

TYPES OF ACCOUNTS Different
ways to set up your account.

HOW TO BUY SHARES Opening an
account and making additional
investments.

HOW TO SELL SHARES Taking money
out and closing your account.

INVESTOR SERVICES Services to
help you manage your account.

SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS,
ACCOUNT POLICIES AND TAXES

TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.

EXCHANGE RESTRICTIONS

KEY FACTS

THE FUNDS AT A GLANCE
MANAGEMENT: Fidelity Management & Research Company (FMR) is the management
arm of Fidelity Investments, which was established in 1946 and is now
America's largest mutual fund manager. FMR Texas Inc. (FTX), a subsidiary
of FMR, chooses investments for Spartan New York Money Market .
As with any mutual fund, there is no assurance that a fund will achieve its
goal.
SPARTAN NY MONEY MARKET
GOAL: High current tax-free income for New York residents while maintaining
a stable $1.00 share price.
STRATEGY: Invests in high-quality, short-term municipal money market
securities whose interest is free from federal income tax and New York
State and City income taxes.
SIZE: As of January 31, 1 996, t he fund had ove r $676 million in
assets.
SPARTAN NY INTERMEDIATE
GOAL: High current tax-free income for New York residents.
STRATEGY: Invests mainly in investment-grade municipal securities whose
interest is free from federal income tax and New York State and City income
taxes, while maintaining an average maturity of three to 10 years.
SIZE: As of January 31, 1996, the fund had over $56 million in assets.
SPARTAN NY INCOME
GOAL: High current tax-free income for New York residents.
STRATEGY: Invests mainly in long-term, investment-grade municipal
securities whose interest is free from federal income tax and New York
State and City income taxes.
SIZE: As of January 31, 1996, the fund had over $327 million in
assets.
WHO MAY WANT TO INVEST
These non-diversified funds may be appropriate for investors in higher tax
brackets who seek high current income that is free from federal and New
York State and City income taxes. Each fund's level of risk and
potential reward, depend on the quality and maturity of its investments.
Spartan New York Money Market is managed to keep its share price stable at
$1.00. Spartan New York Intermediate and Spartan New York Income, with
their broader range of investments, have the potential for higher yields,
but also carry a higher degree of risk. You should consider your investment
objective and tolerance for risk when making an investment decision.
The value of the funds' investments and the income they generate will vary
from day to day, and generally reflect interest rates, market conditions,
and other federal and state political and economic news. When you sell
your shares of Spartan New York Intermediate or Spartan New York Income,
t hey may be worth more or less than what you paid for them. By
themselves, these funds do not constitute a balanced investment plan.
Non-diversified funds may invest a greater portion of their assets in
securities of individual issuers than diversified funds. As a result,
changes in the market value of a single issuer could cause greater
fluctuations in share value than would occur in a more diversified
fund.
The Spartan family of funds is designed for cost-conscious investors
looking for higher yields through lower costs. The Spartan
Approach(registered trademark) requires investors to make high minimum
investments and, in some cases, to pay for individual transactions.

THE SPECTRUM OF
FIDELITY FUNDS
Broad categories of Fidelity
funds are presented here in
order of ascending risk.
Generally, investors seeking
to maximize return must
assume greater risk. The
funds in this prospectus are
in the INCOME category,
except for Spartan New York
Money Market, which is in the
MONEY MARKET category.
(right arrow) MONEY MARKET Seeks
income and stability by
investing in high-quality,
short-term investments.
(right arrow) INCOME Seeks income by
investing in bonds.
(solid bullet) GROWTH AND INCOME
Seeks long-term growth and
income by investing in stocks
and bonds.
(solid bullet) GROWTH Seeks long-term
growth by investing mainly
in stocks.
(checkmark)
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell or
hold shares of a fund. See pages and through for more information
about these fees.
Maximum sales charge on purchases and
reinvested distributions None
Deferred sales charge on redemptions None
Redemption fee (as a % of amount redeemed
on shares held less than180 days) for
Spartan New York Money Market
and Spartan New York Intermediate None
For Spartan New York Income .50%
Exchange and wire transaction fees $5.00
Checkwriting fee, per check written $2.00
( available for Spartan New York
Money Market and Spartan New York
Intermediate)
Account closeout fee $5.00
Annual account maintenance fee
(for accounts under $2,500) $12.00
THESE FEES ARE WAIVED (except for the redemption fee) if your account
balance at the time of the transaction is $50,000 or more.
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to FMR. Expenses are factored into each fund's
share price or dividends and are not charged directly to shareholder
accounts (see page ).
The following are projections based on historical expense s (with respect
to Spartan New York Intermediate, and Spartan New York Income adjusted to
reflect current fees) and are calculated as a percentage of average net
assets.
SPARTAN NY MONEY MARKET
Management fee .50 %

12b-1 fee None

Other expenses .00 %

Total fund operating expenses .50 %

SPARTAN NY INTERMEDIATE
Management fee (after .40%
reimbursement)

12b-1 fee None

Other expenses .00%

Total fund operating expenses .40%

SPARTAN NY INCOME
Management fee .55 %

12b-1 fee None

Other expenses .00 %

Total fund operating expenses .55 %

EXAMPLES: Let's say, hypothetically, that each fund's annual return is 5%
and that its operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses after
the number of years indicated, first assuming that you leave your account
open, and then assuming that you close your account at the end of the
period:
SPARTAN NY MONEY MARKET
Account Account
open closed

After 1 year $ 5 $ 10

After 3 years $ 16 $ 21

After 5 years $ 28 $ 33

After 10 years $ 63 $ 68

SPARTAN NY INTERMEDIATE
Account Account
open closed

After 1 year $ 4 $ 9

After 3 years $ 13 $ 18

After 5 years $ 22 $ 27

After 10 years $ 51 $ 56

SPARTAN N Y INCOME
Account Account
open closed

After 1 year $ 6 $ 11

After 3 years $ 18 $ 23

After 5 years $ 31 $ 36

After 10 years $ 69 $ 74

These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
FMR has voluntarily agreed to temporarily limit Spartan New York
Intermediate's o perating expenses to .40% of its average n et
assets. If this agreement were not in effect, the management fee, other
expenses, and total operating expenses would b e .55%, .00%, and .55%,
respectively. Expenses eligible for reimbursement do not include
interest, taxes, brokerage commissions, or extraordinary expenses.
FINANCIAL HIGHLIGHTS
The tables that follow are included in the funds' Annual Report and have
been audited by Price Waterhouse LLP, independent accountants. Their
reports on the financial statements and financial highlights are included
in the Annual Report. The financial statements and financial highlights are
incorporated by reference into (are legally a part of) the funds' Statement
of Additional Information.
SPARTAN NEW YORK MUNICIPAL MONEY MARKET
Selected Per-Share Data and Ratios

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Years ended 1996 1995 1994 1993E 1992D 1991D 1990C
January 31

Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of
period

Income from .034 .025 .020 .018 .037 .052 .013
Investment
Operations
Net interest
income

Less (.034) (.025) (.020) (.018) (.037) (.052) (.013)
Distributions
From net
interest
income

Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000

end of period

Total returnB 3.46 2.56 1.99 1.85% 3.78 5.37 1.31%
% % % % %

Net assets, end $ 676,475 $ 570,70 $ 462,12 $ 453,812 $ 474,990 $ 466,327 $ 181,864
of period (000 8 4
omitted)

Ratio of .50 .50 .50 .50% .37 .10 0.00%A
expenses to % % % A %F %F ,F
average net
assets

Ratio of net 3.41 2.55 1.97 2.43% 3.71 5.15 5.85%A
interest income % % % A % %
to average net
assets

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Selected Per-Share Data and Ratios

Years ended January 31 1996 1995 1994C

Net asset value, beginning of period $ 9.280 $ 10.090 $ 10.000

Income from Investment Operations .471 .480 .033
Net interest income

Net realized and unrealized gain (loss) .709 (.810) .090

Total from investment operations 1.180 (.330) .123

Less Distributions (.480)E (.480) (.033)
From net interest income

Net asset value, end of period $ 9.980 $ 9.280 $ 10.090

Total returnB 12.98% (3.21)% 1.23%

Net assets, end of period (000 omitted) $ 56,029 $ 35,171 $ 9,273

Ratio of expenses to average net assets .22%D .04%D 0.0%A,
D

Ratio of net interest income to average net 4.87% 5.18% 3.85%A
assets

Portfolio turnover rate 77% 33% 0.0%

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data and
Ratios

Years ended 1996 1995 1994F 1993E 1992D 1991D 1990C
January 31

Net asset value, $ 9.780 $ 11.380 $ 10.890 $ 10.480 $ 10.090 $ 9.690 $ 10.000
beginning of period

Income from .549 .607 .622 .491 .675 .717 .180
Investment
Operations
Net interest
income

Net realized and .986 (1.322) .768 .518 .408 .394 (.318)
unrealized gain
(loss)

Total from 1.535 (.715) 1.390 1.009 1.083 1.111 (.138)
investment
operations

Less Distributions (.555)H (.607) (.622) (.491) (.675) (.717) (.180)
From net interest
income

From net realized -- (.160) (.280) (.110) (.020) -- --
gain

In excess of net -- (.120) -- -- -- -- --
realized gain

Total distributions (.555) (.887) (.902) (.601) (.695) (.717) (.180)

Redemption fees .000 .002 .002 .002 .002 .006 .008
added
to paid in capital

Net asset value, $ 10.760 $ 9.780 $ 11.380 $ 10.890 $ 10.480 $ 10.090 $ 9.690
end of period

Total returnB 16.05% (6.16)% 13.12% 9.83% 11.03% 11.88% (1.38)%

Net assets, end of $ 327,698 $ 295,10 $ 446,03 $ 366,84 $ 291,91 $ 163,47 $ 57,083
period 5 0 0 3 2
(000 omitted)

Ratio of expenses .54%G .55% .55% .48%A,G .38%G .19%G 0.0%G
to average net
assets

Ratio of net interest 5.30% 5.98% 5.49% 6.03%A 6.51% 7.21% 7.75%A
income to average
net assets

Portfolio turnover 82% 38% 50% 35%A 21% 40% 24%A
rate

</TABLE>

A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER
HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
CFROM FEBRUARY 3, 1990 (COMMENCEMENT OF OPERATIONS) TO APRIL 30, 1990
D YEARS ENDED APRIL 30
E MAY 1, 1992 TO JANUARY 31, 1993
F EFFECTIVE FEBRUARY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
G FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
H THE AMOUNT SHOWN REFLECTS CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES.
PERFORMANCE
Mutual fund performance can be measured as TOTAL RETURN or YIELD. The total
returns that follow are based on historical fund results and do not reflect
the effect of any transaction fees you may have paid. The figures would be
lower if fees were taken into account.
Each fund's fiscal year runs from February 1 through January 31. The
table s below show a fund's performance over past fiscal years
compared to different measures, including a comparative index, a
competitive funds average and a measure of inflation (CPI) . Data for
the comparative indexes is available only from June 30, 1993 to the
present. The charts on page present calendar year performance and do not
reflect the effect of the $5 account closeout fee.
AVERAGE ANNUAL TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal periods ended Past 1 Past 5 Life of
January 31, 1996 year years fund

Spartan New York Money Market 3.46% 2.95 3.39 %
% A

Spartan New York Intermediate 12.98% n/a 4.98%
B

Lehman Bros. New York 1-17 Year 13.68% n/a n/a
Municipal Bond Index

Lipper New York Intermediate 11.67% 7.22% 4.49%
Municipal Debt Funds Average

Spartan New York Income 16.05% 9.06 8.79%
% A

Lehman Bros. New York 4 Plus Year 16.15% n/a n/a
Municipal Bond Index

Lipper New York Municipal Debt Funds 14.11% 8.54% 8.32%
Average

Consumer Price Index 2.86% 2.81% n/a

</TABLE>

CUMULATIVE TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal periods ended Past 1 Past 5 Life of
January 31, 1996 year years fund

Spartan New York Money Market 3.46% 15.62% 22.12%
A

Spartan New York Intermediate 12.98% n/a 10.70%
B

Lehman Bros. New York 1-17 Year 13.68% n/a n/a
Municipal Bond Index

Lipper New York Intermediate 11.67% 41.71% 9.59%
Municipal Debt Funds Average

Spartan New York Income 16.05% 54.31% 65.73%
A

Lehman Bros. New York 4 Plus Year 16.15% n/a n/a
Municipal Bond Index

Lipper New York Municipal Debt Funds 14.11% 50.67% 60.56%
Average

Consumer Price Index 2.86% 14.86% n/a

</TABLE>

A FROM FEBRUARY 3, 1990
B FROM DECEMBER 29, 1993
EXPLANATION OF TERMS
UNDERSTANDING
PERFORMANCE
YIELD illustrates the income
earned by a fund over a recent
period. Seven-day yields are
the most common illustration
of money market performance.
30-day yields are usually used
for bond funds. Yields change
daily, reflecting changes in
interest rates.
TOTAL RETURN reflects both the
reinvestment of income and
capital gain distributions, and
any change in a fund's share
price.
(checkmark)
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. When a money
market fund yield assumes that income earned is reinvested, it is called an
EFFECTIVE YIELD. A TAX-EQUIVALENT YIELD shows what an investor would have
to earn before taxes to equal a tax-free yield. Yields for the bond funds
are calculated according to a standard that is required for all stock and
bond funds. Because this differs from other accounting methods, the quoted
yield may not equal the income actually paid to shareholders.
THE LEHMAN BROTHERS NEW YORK 1-17 YEAR MUNICIPAL BOND INDEX AND THE
LEHMAN BROTHERS NEW YORK 4 PLUS YEAR MUNICIPAL BOND INDEX are comparative
indexes for Spartan New York Intermediate and Spartan New York Income,
respectively. The Lehman Brothers New York 1-17 Year Municipal Bond Index
includes New York investment-grade municipal bonds with maturities between
one and 17 years. The Lehman Brothers New York 4 Plus Year Municipal Bond
Index includes New York investment-grade municipal bonds with maturities of
four years or greater.
THE COMPETITIVE FUNDS AVERAGES are the Lipper New York Intermediate
Municipal Debt Funds Average (Spartan New York Intermediate) and the Lipper
New York Municipal Debt Funds Average (Spartan New York Income) which
currently reflect the performance of over 23 and 88 mutual funds,
respectively with similar objectives. These averages which assume
reinvestment of dividends, are published by Lipper Analytical Services Inc.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. government.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
SPARTAN NEW YORK INTERMEDIATE
Calendar year total returns 1994 1995
Spartan New York Intermediate -4.27
% 14.43%
Lipper New York Intermediate

Municipal Debt Funds Average -3.62
% 12.71%
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: nil
Row: 2, Col: 1, Value: nil
Row: 2, Col: 2, Value: nil
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: nil
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: nil
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: nil
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: nil
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: 0.0
Row: 8, Col: 1, Value: 0.0
Row: 8, Col: 2, Value: nil
Row: 9, Col: 1, Value: 0.0
Row: 9, Col: 2, Value: -4.27
Row: 10, Col: 1, Value: 0.0
Row: 10, Col: 2, Value: 14.43
(LARGE SOLID BOX) Spartan

New York
Intermediate

SPARTAN NEW YORK INCOME
Calendar year total returns 1991 1992 1993 1994 1995
Spartan New York Income 14.39% 9.45% 13.40% -8.
34% 19.13%
Lipper New York

Municipal Debt Funds Average 13.28% 9.61% 12.71% -7.
52% 16.73%
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: nil
Row: 2, Col: 1, Value: nil
Row: 2, Col: 2, Value: nil
Row: 3, Col: 1, Value: 0.0
Row: 3, Col: 2, Value: nil
Row: 4, Col: 1, Value: 0.0
Row: 4, Col: 2, Value: nil
Row: 5, Col: 1, Value: 0.0
Row: 5, Col: 2, Value: nil
Row: 6, Col: 1, Value: 0.0
Row: 6, Col: 2, Value: 14.39
Row: 7, Col: 1, Value: 0.0
Row: 7, Col: 2, Value: 9.450000000000001
Row: 8, Col: 1, Value: 0.0
Row: 8, Col: 2, Value: 13.4
Row: 9, Col: 1, Value: 0.0
Row: 9, Col: 2, Value: -8.34
Row: 10, Col: 1, Value: 0.0
Row: 10, Col: 2, Value: 19.13
(LARGE SOLID BOX) Spartan

New York

Income

THE FUND IN DETAIL

CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. In technical terms Spartan New
York Money Market is currently a non-diversified fund of Fidelity New
York Municipal Trust II and Spartan New York Intermediate and Spartan
New York Income are currently non-diversified funds of Fidelity New
York Municipal Trust. Both trusts are open-end management investment
companies. Fidelity New York Municipal Trust II was organized as a Delaware
business trust on June 20, 1991. Fidelity New York Municipal Trust was
organized as a Massachusetts business trust on April 25, 1983. There
is a remote possibility that one fund might become liable for a
misstatement in the prospectus about another fund.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review performance. The majority of trustees are not otherwise
affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
Fidelity will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. For the money market fund
you are entitled to one vote for each share you own. For the bond funds,
the number of votes you are entitled to is based upon the dollar value of
your investment.
FMR AND ITS AFFILIATES
FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(solid bullet) Number of Fidelity mutual
funds: over 215
(solid bullet) Assets in Fidelity mutual
funds: over $366 billion
(solid bullet) Number of shareholder
accounts: over 24 million
(solid bullet) Number of investment
analysts and portfolio
managers: over 200
(checkmark)
The funds are managed by FMR, which chooses their investments and handles
their business affairs. FTX, located in Irving, Texas, h as primary
responsibility for providing investment management services fo r Spartan
New York Money Market.
Norman Lind is manager of Spartan New York Intermediate and Spartan New
York Income, which he has managed since October 1995 and October 1993,
respectively. He is also Vice President of Spartan New York Income.
Mr. Lind also manages New York Insured Municipal Income,
New York Municipal Income , and Spartan Municipal Income. Previously,
he served as a municipal research analyst. Mr. Lind joined Fidelity in
1986.
UMB Bank, n.a. , is each fund's transfer agent, although it employs
FSC to perform these functions for the funds. It is located at 1010 Grand
Avenue, Kansas City, Missouri.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Service Co. (FSC) performs transfer agent
servicing functions for the funds.
FMR Corp. is the ultimate parent company of FMR and FTX. Members of the
Edward C. Johnson 3d family are the predominant owners of a class of shares
of common stock representing approximately 49% of the voting power of FMR
Corp. Under the Investment Company Act of 1940 (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, the Johnson family
may be deemed under the 1940 Act to form a controlling group with respect
to FMR Corp.
FMR may use its broker-dealer affiliates and other firms that sell fund
shares, to carry out the funds' transactions provided that a fund receives
brokerage services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
SPARTAN NEW YORK MUNICIPAL MONEY MARKET seeks high current income
that is free from federal income tax and New York State and City income
taxes while maintaining a stable $1.00 share price by investing in
high-quality, short-term municipal money market securities of all types.
FMR normally invests at least 65% of the fund's total assets in state
tax-free securities, and normally invests so that at least 80% of the
fund's income distributions are free from federal income tax.
When you sell your shares, they should be worth the same amount as when you
bought them. Of course, there is no guarantee that the fund will maintain a
stable $1.00 share price. The fund follows industry-standard guidelines on
the quality and maturity of its investments, which are designed to help
maintain a stable $1.00 share price. The fund will purchase only
high-quality securities that FMR believes present minimal credit risks and
will observe maturity restrictions on securities it buys. It is possible
that a major change in interest rates or a default on the fund's
investments could cause its share price (and the value of your investment)
to change.
SPARTAN NEW YORK INTERMEDIATE MUNICIPAL INCOME seeks high current
income that is free from federal income tax and New York State and City
income taxes by investing mainly in high-quality and
upper-medium-grade-quality municipal securities, although it can also
invest in some lower-quality securities. Although the fund can invest in
securities of any maturity, the fund maintains a dollar-weighted average
maturity of three to 10 years under normal conditions. FMR seeks to manage
the fund so that it generally reacts to changes in interest rates similarly
to municipal bonds with maturities between seven and 10 years. As of
January 31, 1996, the fund's dollar-weighted average maturity was 9.0
years. FMR normally invests at least 65% of the fund's total assets in
state tax-free securities, and normally invests at least 80% of the fund's
assets in municipal securities whose interest is free from federal income
tax.
SPARTAN NEW YORK MUNICIPAL INCOME seeks high current income that is free
from federal income tax and New York State and City income taxes by
investing primarily in municipal securities judged by FMR to be of
investment-grade quality, although it can also invest in some lower-quality
securities. Although the fund can invest in securities of any maturity, FMR
seeks to manage the fund so that it generally reacts to changes in interest
rates similarly to municipal bonds with maturities between eight and 18
years. As of January 31, 1996, the fund's dollar-weighted average maturity
was approximately 14.9 years. FMR normally invests so that at least 80% of
the fund's income distributions are free from federal and New York State
and City income taxes.
EACH FUND'S performance is affected by the economic and political
conditions within the state of New York. Recently, both the city and state
of New York have experienced significant financial difficulty, and the
state's credit standing is one of the lowest in the country.
The money market fund stresses preservation of capital, liquidity, and
income. The bond funds seek to provide a higher level of income by
investing in a broader range of securities.
The total return from a bond is a combination of income and price gains
or losses. While income is the most important component of bond returns,
over time, the bond funds' emphasis on income does not mean that a fund
invests only in the highest-yielding bonds available, or that it can avoid
risks to principal. In selecting investments for the bond funds, FMR
considers a bond fund's income potential together with its potential for
price gains or losses. FMR focuses on assembling a portfolio of
income-producing securities that it believes will provide the best tradeoff
between risk and return within the range of securities that are eligible
investments for the funds.
Each fund's yield and each bond fund's share price change daily and are
based on interest rates, market conditions, other economic and political
news, and on the quality and maturity of its investments. In general, bond
prices rise when interest rates fall, and vice versa. This effect is
usually more pronounced for longer-term securities. Lower-quality
securities offer higher yields, but also carry more risk. FMR may use
various investment techniques to hedge a portion of the bond funds' risks,
but there is no guarantee that these strategies will work as intended. When
you sell your shares of the bond funds, they may be worth more or less than
what you paid for them.
If you are subject to the federal alternative minimum tax, you should note
that each fund may invest all of its assets in municipal securities issued
to finance private activities. The interest from these investments is a
tax-preference item for purposes of the tax.
FMR normally invests each fund's assets according to its investment
strategy. The funds do not expect to invest in federally taxable
obligations, and the bond funds do not expect to invest in state taxable
obligations. Each fund also 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.
SECURITIES AND INVESTMENT PRACTICES
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.
Any restrictions listed supplement those discussed earlier in this
section. A complete listing of each fund's limitations and more detailed
information about the funds' investments are contained in the funds' SAI.
Policies and limitations are considered at the time of purchase; the sale
of instruments is not required in the event of a subsequent change in
circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its goal.
Current holdings and recent investment strategies are described in the
funds' financial report which is sent to shareholders twice a year. For a
free SAI or financial report, call 1-800-544-8888.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Lower-quality debt securities (sometimes called "municipal junk bonds") are
considered to have speculative characteristics, and involve greater risk of
default or price changes due to changes in the issuer's creditworthiness
or they may already be in default. The market prices of these
securities may fluctuate more than higher-quality securities and may
decline significantly in periods of general or regional economic
difficulty.
The tables on pages and provide a summary of ratings assigned to debt
holdings (not including money market instruments) in Spartan New York
Intermediate's and Spartan New York Income's portfolios. These figures are
dollar-weighted averages of month-end portfolio holdings during fiscal
1996, and are presented as a percentage of total security investments.
These percentages are historical and do not necessarily indicate a fund's
current or future debt holdings.
RESTRICTIONS: For Spartan New York Intermediate, purchase of a debt
security is consistent with the fund's debt quality policy if it is rated
at or above the stated level by Moody's or rated in the equivalent
categories by S&P, or is unrated but judged to be of equivalent quality by
FMR. The fund currently intends to limit its investments in lower than
A-quality debt securities to 40% of its total assets and in Ba-quality debt
securities or lower to 5% of its assets. Spartan New York
Income does not currently intend to invest more than one-third of
its assets in bonds judged by FMR to be of equivalent quality to those
rated Ba or lower by Moody's and BB or lower by S&P, and does not currently
intend to invest in bonds of equivalent quality to bonds rated lower than
B. The fund does not currently intend to invest in bonds rated below Caa by
Moody's or CCC by S&P.
SPARTAN NY INTERMEDIATE
Fiscal 1996 Debt Holdings, by Rating MOODY'S STANDARD & POOR'S
INVESTORS SERVICE, INC.
Rating Average A Rating Averag
e A
INVESTMENT GRADE
Highest quality Aaa AAA
High quality Aa 61.9% AA 68.5 %
Upper-medium grade A A
Medium grade Baa 16.1% BBB 8.6 %
LOWER QUALITY
Moderately speculative Ba 0.0 % BB 0.0 %
Speculative B 0.0 % B 0.0 %
Highly speculative Caa 0.0 % CCC 0.0 %
Poor quality Ca 0.0 % CC 0.0 %
Lowest quality, no interest C C
In default, in arrears --- D 0.0%
78.0 % 77.1 %
A THE DOLLAR-WEIGHTED AVERAGE OF DEBT SECURITIES NOT RATED BY MOODY'S OR
S&P AMOUNTED TO 2.5 %. THIS MAY INCLUDE SECURITIES RATED BY OTHER
NATIONALLY RECOGNIZED RATING SERVICES, AS WELL AS UNRATED SECURITIES. FMR
HAS DETERMINED THAT UNRATED SECURITIES THAT ARE LOWER-QUALITY ACCOUNT FOR
0.0 % OF THE FUND'S TOTAL SECURITY INVESTMENTS. REFER TO THE FUNDS'
STATEMENT OF ADDITIONAL INFORMATION FOR A MORE COMPLETE DISCUSSION OF
THESE RATINGS.

SPARTAN NY INCOME
Fiscal 199 6 Debt Holdings, by Rating MOODY'S STANDARD & POOR'S
INVESTORS SERVICE, INC.
Rating Average A Rating Averag
e A
INVESTMENT GRADE
Highest quality Aaa AAA
High quality Aa 51.4 % AA 50.1 %
Upper-medium grade A A
Medium grade Baa 38.0 % BBB 29.9 %
LOWER QUALITY
Moderately speculative Ba 0.6 % BB 3.5 %
Speculative B 0.0 % B 0.0 %
Highly speculative Caa 0.0 % CCC 0.0 %
Poor quality Ca 0.0 % CC 0.0 %
Lowest quality, no interest C C
In default, in arrears --- D 0.0 %
90.0% 83.5 %
A THE DOLLAR-WEIGHTED AVERAGE OF DEBT SECURITIES NOT RATED BY MOODY'S OR
S&P AMOUNTED TO 2.3 %. THIS MAY INCLUDE SECURITIES RATED BY OTHER
NATIONALLY RECOGNIZED RATING SERVICES, AS WELL AS UNRATED SECURITIES .
FMR
HAS DETERMINED THAT UNRATED SECURITIES THAT ARE LOWER-QUALITY ACCOUNT FOR
2.3% OF THE FUND'S TOTAL SECURITY INVESTMENTS. REFER TO THE FUNDS'
STATEMENT
OF ADDITIONAL INFORMATION FOR A MORE COMPLETE DISCUSSION OF THESE RATINGS.

MONEY MARKET SECURITIES are high-quality, short-term obligations issued by
municipalities, local and state governments, and other entities. These
obligations may carry fixed, variable, or floating interest rates. Some
money market securities employ a trust or other similar structure to modify
the maturity, price characteristics, or quality of financial assets so that
they are eligible investments for money market funds. If the structure does
not perform as intended, adverse tax or investment consequences may result.
MUNICIPAL SECURITIES are issued to raise money for a variety of public or
private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities. They
may be issued in anticipation of future revenues and may be backed by the
full taxing power of a municipality, the revenues from a specific project,
or the credit of a private organization . The value of some or all
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. A fund
may own a municipal security directly or through a participation interest.
CREDIT SUPPORT. Issuers may employ various forms of credit
enhancement, including letters of credit, guarantees, or insurance from a
bank, insurance company, or other entity. These arrangements expose the
fund to the credit risk of the entity. In the case of foreign entities,
extensive public information about the entity may not be available and the
entity may be subject to unfavorable political, ec o nomic, or
governmental developments which might affect its ability to honor its
commitment.
STATE MUNICIPAL SECURITIES include municipal obligations issued by
the state of New York or its counties, municipalities, authorities, or
other subdivisions. The ability of issuers to repay their debt can be
affected by many factors that impact the economic vitality of either the
state or a region within the state.
Other state tax-free securities include obligations of the U.S. territories
and possessions such as Guam, the Virgin Islands, and Puerto Rico, and
their political subdivisions and public corporations. The economy of Puerto
Rico is closely linked to the U.S. economy, and will be affected by the
strength of the U.S. dollar, interest rates, the price stability of oil
imports, and the continued existence of favorable tax incentives.
ASSET-BACKED SECURITIES include interests in pools of purchase contracts,
financing leases, or sales agreements entered into by municipalities. These
securities usually rely on continued payments by a municipality, and may
also be subject to prepayment risk.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes. Inverse floaters have interest rates that move in the
opposite direction from a benchmark, making the security's market value
more volatile.
RESTRICTIONS: The money market fund may not purchase certain types of
variable and floating rate securities which are inconsistent with the
fund's goal of maintaining a stable share price.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire land,
equipment, or facilities. If the municipality stops making payments or
transfers its obligations to a private entity, the obligation could lose
value or become taxable.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or a financial intermediary. In exchange for this benefit, the funds may
pay periodic fees or accept a lower interest rate. The credit quality of
the investment may be affected by the creditworthiness of the put provider.
Demand features, standby commitments, and tender options are types of put
features.
PRIVATE ENTITIES may be involved in some municipal securities. For example,
industrial revenue bonds are backed by private entities, and resource
recovery bonds often involve private corporations. The viability of a
project or tax incentives could affect the value and credit quality of
these securities.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, or other factors that affect security values. These techniques may
involve derivative transactions such as buying and selling options and
futures contracts and purchasing in dexed securities.
FMR can use these practices to adjust the risk and return characteristics
of a fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
RESTRICTIONS: The money market fund may not use investment techniques which
are inconsistent with the fund's goal of maintaining a stable share price.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable
price. The sale of some illiquid securities and some other securities may
be subject to legal restrictions. Difficulty in selling securities may
result in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
10% of its assets would be invested in illiquid securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect a fund's yield or the market value of its assets.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry or type of
project. Economic, business, or political changes can affect all securities
of a similar type. A fund that is not diversified may be more
sensitive to these changes, and also to changes in the market value of a
single issuer or industry.
RESTRICTIONS: The funds are considered non-diversified. Generally, to meet
federal tax requirements at the close of each quarter, a fund does not
invest more than 25% of its total assets in any one issuer and, with
respect to 50% of total assets, does not invest more than 5% of its total
assets in any one issuer. These limitations do not apply to U.S. government
securities. A fund may invest more than 25% of its total assets in tax-free
securities that finance similar types of projects.
BORROWING. A fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements. If a bond fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: A fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
SPARTAN NEW YORK MUNICIPAL MONEY MARKET seeks as high a level of
current income, exempt from federal income tax and New York State and City
income taxes, as is consistent with preservation of capital by investing in
high-quality, short-term municipal obligations. The fund will normally
invest so that at least 80% of its income distributions are exempt from
federal income tax.
SPARTAN NEW YORK INTERMEDIATE seeks a high level of current income
exempt from federal income tax and New York State and City income taxes.
The fund will normally invest at least 80% of its assets in municipal
securities whose interest is free from federal income tax.
SPARTAN NEW YORK INCOME seeks the highest level of current income,
exempt from federal income tax and New York State and City income taxes,
available from municipal bonds judged by FMR to be of investment-grade
quality, although the fund may also invest a portion of its assets in bonds
rated below investment-grade quality. The fund will normally invest so that
at least 80% of its income distributions are exempt from federal and New
York State and City income taxes.
EACH FUND may borrow only for temporary or emergency purposes, but not in
an amount exceeding 33% of its total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services for Spartan New York Money Market.
FMR may, from time to time, agree to reimburse the funds for management
fees 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 terminated at any
time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. Each fund
pays a management fee at a fixed annual rate of its average net assets:
.50% for Spartan New York Money Market and .55% for Spartan
New York Intermediate and Spartan New York Income . The
total management fee rate for Spartan New York Intermediate for fiscal
1996, after reimbursement, was .22% .
FMR HAS SUB-ADVISORY AGREEMENTS with FTX, which has primary responsibility
for providing investment management for the funds, while FMR retains
responsibility for providing other management services. FMR pays FTX 50% of
its management fee (before expense reimbursements) for these services.
FSC performs many transaction and accounting functions for the funds. These
services include processing shareholder transactions and calculating each
fund's share price. FMR, and not the funds, pays for these services.
To offset shareholder service costs, FMR or its affiliates also collect the
funds' $5.00 exchange fee, $5.00 account closeout fee, $5.00 fee for wire
purchases and redemptions, and for Spartan New York Money Market and
Spartan New York Intermediate the $2.00 checkwriting
charge . For fiscal 1996, these fees amounted to $3,935, $996, $1,180,
and $5,645, respectively, for Spartan New York Money Market, $460, $170,
$85, and $190, respectively, for Spartan New York Intermediate, and $2,510,
$930, and $340, respectively, for Spartan New York Income.
Each fund has adopted a Distribution and Service Plan. These plans
recognize that FMR may use its resources, including management fees, to pay
expenses associated with the sale of fund shares. This may include payments
to third parties, such as banks or broker-dealers, that provide shareholder
support services or engage in the sale of the fund's shares. It is
important to note, however, that the funds do not pay FMR any separate fees
for this service.
For fiscal 1996, the portfolio turnover rates for Spartan New York
Intermediate and Spartan New York Income were 77% and 82%, respectively.
These rates vary from year to year.
YOUR ACCOUNT

DOING BUSINESS WITH FIDELITY
Fidelity Investments 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-sheltered
retirement plans for individuals investing on their own or through their
employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over 80 walk- in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in a fund through a brokerage account.
If you are investing through FBSI or another financial institution or
investment professional, refer to its program materials for any special
provisions regarding your investment in the fund.
The different ways to set up (register) your account with Fidelity are
listed in the table that follows.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
EACH FUND'S SHARE PRICE, called net asset value (NAV), is calculated
every business day. Spartan New York Money Market is managed to keep its
share price stable at $1.00. Each fund's shares are sold without a sales
charge.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another Fidelity
fund.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $10,000
For Spartan New York
Money Market $25,000
TO ADD TO AN ACCOUNT $1,000
Through automatic investment
plans $500
MINIMUM BALANCE $5,000
For Spartan New York
Money Market $10,000
These minimums may vary for investments through Fidelity Portfolio
Advisory Services. Refer to the program materials for details.

UNDERSTANDING THE
SPARTAN APPROACH(registered trademark)
Fidelity's Spartan Approach is
based on the principle that
lower fund expenses can
increase returns. The Spartan
funds keep expenses low in
two ways. First, higher
investment minimums reduce
the effect of a fund's fixed
costs, many of which are paid
on a per-account basis.
Second, unlike most mutual
funds that include transaction
costs as part of overall fund
expenses, Spartan
shareholders pay directly for
the transactions they make.
(checkmark)

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TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT

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Wire (wire_graphic) (small solid bullet) There may be a $5.00 (small solid bullet) There may be a $5.00
fee for each wire fee for each wire
purchase. purchase.
(small solid bullet) Call 1-800-544-7777 to (small solid bullet) Wire to:
set up your account Bankers Trust
and to arrange a wire Company,
transaction. Bank Routing
(small solid bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify the complete
Bank Routing name of the fund and
#021001033, include your account
Account #00163053. number and your
Specify the complete name.
name of the fund and
include your new
account number and
your name.

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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118

</TABLE>

HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next share price calculated after your order is received and accepted.
Share price is normally calculated at 4 p.m. Eastern time.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $5,000
worth of shares in the account ($10,000 for Spartan New York Money
Market) to keep it open.
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
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 redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(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.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
and
(small solid bullet) Any other applicable requirements listed in the table
that follows.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
CHECKWRITING
If you have a checkbook for your account in Spartan New York Money
Market or Spartan New York Intermediate, you may write an unlimited
number of checks. Do not, however, try to close out your account by check.
ACCOUNT TYPE SPECIAL REQUIREMENTS

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IF YOU SELL SHARES OF SPARTAN NEW YORK INCOME AFTER HOLDING THEM LESS THAN 180 DAYS,
THE FUND WILL DEDUCT A REDEMPTION FEE EQUAL TO .50% OF THE VALUE OF THOSE SHARES.
IF YOUR ACCOUNT BALANCE IS LESS THAN $50,000, THERE ARE FEES FOR INDIVIDUAL REDEMPTION
TRANSACTIONS: $2.00 FOR EACH CHECK YOU WRITE AND $5.00 FOR EACH EXCHANGE, BANK WIRE,
AND ACCOUNT CLOSEOUT.

</TABLE>

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Check (check_graphic) All account types (small solid bullet) Minimum check: $1,000.
(small solid bullet) All account owners must sign
a signature card to receive a
checkbook.

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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118

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INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT BALANCES
1-800-544-7544
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
QUOTES
1-800-544-8544
RETIREMENT ACCOUNT
ASSISTANCE
1-800-544-4774
AUTOMATED SERVICE
(checkmark)
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)

To reduce expenses, only one copy of most financial reports will be mailed
to your household, even if you have more than one account in the fund. Call
1-800-544-6666 if you need copies of financial reports or historical
account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing. There may be a $5.00 fee for
each exchange out of the funds, unless you place your transaction on
Fidelity's automated exchange services.
Note that exchanges out of a fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your
account.
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans 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 a
home, educational expenses, and other long-term financial goals.
REGULAR INVESTMENT PLANS

FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND

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MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 Monthly or (small solid bullet) For a new account, complete the
quarterly appropriate section on the fund
application.
(small solid bullet) For existing accounts, call
1-800-544-6666 for an application.
(small solid bullet) To change the amount or frequency of
your investment, call 1-800-544-6666 at
least three business days prior to your
next scheduled investment date.

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

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<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 Every pay (small solid bullet) Check the appropriate box on the fund
period application, or call 1-800-544-6666 for an
authorization form.
(small solid bullet) Changes require a new authorization
form.

</TABLE>

<TABLE>
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<S> <C> <C>
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND

</TABLE>

<TABLE>
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<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 Monthly, (small solid bullet) To establish, call 1-800-544-6666 after
bimonthly, both accounts are opened.
quarterly, or (small solid bullet) To change the amount or frequency of
annually your investment, call 1-800-544-6666.

</TABLE>

A BECAUSE BOND FUND SHARE PRICES FLUCTUATE, THOSE FUNDS MAY NOT BE
APPROPRIATE CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES

DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly. Capital gains earned by the bond funds are
normally distributed in March and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. Each fund offers four
options (three fo r Spartan New York Money Market).
5. REINVESTMENT OPTION. Your dividend 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.
6. INCOME-EARNED OPTION. Your capital gain distributions, if any, will be
automatically reinvested, but you will be sent a check for each dividend
distribution. This option is not available for Spartan New York Money
Market.
7. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions, if any.
8. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions, if any, will be automatically invested in
another identically registered Fidelity fund.
Dividends will be reinvested at the fund's NAV on the last day of the
month. Capital gain distributions, if any, will be reinvested at the NAV as
of the date the fund deducts the distribution from its NAV. The mailing of
distribution checks will begin within seven days.
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you
are entitled to your share of
the fund's net income and
gains on its investments. The
fund passes its earnings
along to its investors as
DISTRIBUTIONS.
Each fund earns interest from
its investments. These are
passed along as DIVIDEND
DISTRIBUTIONS. The fund may
realize capital gains if it sells
securities for a higher price
than it paid for them. These
are passed along as CAPITAL
GAIN DISTRIBUTIONS. Money
market funds usually don't
make capital gain
distributions.
(checkmark)
TAXES
As with any investment, you should consider how an investment in a tax-free
fund could affect you. Below are some of the funds' tax implications.
TAXES ON DISTRIBUTIONS. Interest income that a fund earns is distributed to
shareholders as income dividends. Interest that is federally tax-free
remains tax-free when it is distributed.
However, gain on the sale of tax-free bonds results in taxable
distributions. Short-term capital gains and a portion of the gain on bonds
purchased at a discount are taxed as dividends. Long-term capital gain
distributions are taxed as long-term capital gains. These distributions are
taxable when they are paid, whether you take them in cash or reinvest them.
However, distributions declared in December and paid in January are taxable
as if they were paid on December 31. Fidelity will send you and the IRS a
statement showing the tax status of the distributions paid to you in the
previous year.
The interest from some municipal securities is subject to the federal
alternative minimum tax. Each fund may invest up to 100% of its assets in
these securities. Individuals who are subject to the tax must report this
interest on their tax returns.
During fiscal 1996, 100% of each fund's income dividends was free from
federal income tax and 100%, 98.2% and 99% were free from New York State
and City income taxes for Spartan New York Money Market, Spartan New York
Intermediate and Spartan New York Income, respectively. 37.3% of Spartan
New York Money Market's 13.4% of Spartan New York Intermediate's and 23.8%
of Spartan New York Income's dividends were subject to the federal
alternative minimum tax.
TAXES ON TRANSACTIONS. Your bond fund redemptions - including exchanges to
other Fidelity funds - are subject to capital gains tax. A capital gain or
loss is the difference between the cost of your shares and the price you
receive when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before a fund deducts a capital
gain distribution from its NAV, you will pay the full price for the shares
and then receive a portion of the price back in the form of a taxable
distribution.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's NAV as of the close of
business of the NYSE, normally 4 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
The money market fund values the securities it owns on the basis of
amortized cost. This method minimizes the effect of changes in a security's
market value and helps the fund to maintain a stable $1.00 share price. For
the bond funds, assets are valued primarily on the basis of market
quotations, if available. Since market quotations are often unavailable,
assets are usually valued by a method that the Board of Trustees believes
accurately reflects fair value.
EACH FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
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.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
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) Each fund 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
cancelled and you could be liable for any losses or fees a fund or its
transfer agent has incurred.
(small solid bullet) You begin to earn dividends as of the first business
day following the day of your purchase.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY OR SELL SHARES OF THE FUNDS THROUGH A BROKER, who may charge
you a fee for this service. If you invest through a broker or other
institution, read its program materials for any additional service features
or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
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
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay you.
(small solid bullet) Shares will earn dividends through the date of
redemption; however, shares redeemed on a Friday or prior to a holiday will
continue to earn dividends until the next business day.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) Each fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
(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.
THE REDEMPTION FEE for Spartan New York Income, if applicable, will
be deducted from the amount of your redemption. This fee is paid to the
fund rather than FMR, and it does not apply to shares that were acquired
through reinvestment of distributions. If shares you are redeeming were not
all held for the same length of time, those shares you held longest will be
redeemed first for purposes of determining whether the fee applies.
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 charge 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 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, but it will apply to checkwriting.
FIDELITY RESERVES THE RIGHT TO 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 $60.00 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 the transfer agent, is designed to offset in part the
relatively higher costs of servicing smaller accounts . The fee will not
be deducted from retirement accounts (except non-prototype retirement
accounts), accounts using regular investment plans, or if total assets
in Fidelity funds exceed $50,000. Eligibility for the $50,000 waiver is
determined by aggregating Fidelity mutual fund accounts maintained by FSC
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 $5,000 ($10,000 for Spartan New York
Money Market ) you will be given 30 days' notice to reestablish the
minimum balance. If you do not increase your balance, Fidelity reserves the
right to close your account and send the proceeds to you. Your shares will
be redeemed at the NAV on the day your account is closed and the $5.00
account closeout fee will be charged.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
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:
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange 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) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, each fund reserves the right to 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, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) Each fund reserves the right to 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.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.

This prospectus is printed on recycled paper using soy-based inks.
SPARTAN NEW YORK MUNICIPAL MONEY MARKET FUND
A FUND OF FIDELITY NEW YORK MUNICIPAL TRUST II
SPARTAN NEW YORK INTERMEDIATE MUNICIPAL INCOME FUND
SPARTAN NEW YORK MUNICIPAL INCOME FUND
FUNDS OF FIDELITY NEW YORK MUNICIPAL TRUST
STATEMENT OF ADDITIONAL INFORMATION
MARCH 23, 1996
This Statement is not a prospectus but should be read in conjunction with
the funds' current Prospectus (dated March 23, 1996). Please retain this
document for future reference. The funds' financial statements and
financial highlights, included in the Annual Report for the fiscal year
ended January 31, 1996, are incorporated herein by reference. To obtain an
additional copy of the Prospectus or the Annual Report, please call
Fidelity Distributors Corporation at 1-800-544-8888.
TABLE OF CONTENTS PAGE

Investment Policies and Limitations

Special Considerations Affecting New York

Special Considerations Affecting Puerto Rico

Portfolio Transactions

Valuation of Portfolio Securities

Performance

Additional Purchase and Redemption Information

Distributions and Taxes

FMR

Trustees and Officers

Management Contracts

Distribution and Service Plans

Contracts with FMR Affiliates

Description of the Trusts

Financial Statements

Appendix

INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISER
FMR Texas Inc. (FTX) (money market fund)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
UMB Bank, n.a. (UMB)
and Fidelity Service Co. (FSC)
SNR-ptb-396
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.
Each 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) of the fund.
However, except for the fundamental investment limitations listed below,
the investment policies and limitations described in this Statement of
Additional Information are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF SPARTAN NEW YORK MUNICIPAL MONEY MARKET FUND
(SPARTAN NEW YORK MONEY MARKET)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) sell securities short, unless it owns, or by virtue of its ownership of
other securities, has the right to obtain at no added cost, securities
equivalent in kind and amount to the securities sold short;
(3) purchase securities on margin, except that the fund may obtain such
short-term credits as are necessary for the clearance of transactions;
(4) 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;
(5) underwrite securities issued by others (except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);
(6) 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;
(7) 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);
(8) purchase or sell physical commodities unless acquired as a result of
ownership of securities; or
(9) 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.
(10) 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) To meet federal tax requirements for qualification as a "regulated
investment company," the fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(ii) 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) if, as a result, the fund would hold more
than 10% of the outstanding voting securities of that issuer.
(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 (4)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(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 purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(vii) 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.
(viii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(ix) 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 limitations (6) 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 the money market fund's limitations on quality and maturity, see the
section entitled "Quality and Maturity" on page 10.
INVESTMENT LIMITATIONS OF SPARTAN NEW YORK INTERMEDIATE MUNICIPAL INCOME
FUND
( SPARTAN N EW YORK INTERMEDIATE )
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as 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); or
(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) 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) To meet federal tax requirements for qualification as a "regulated
investment company," the fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(ii) 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) if, as a result, the fund would hold more
than 10% of the outstanding voting securities of that issuer.
(iii) 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.
(iv) 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.
(v) 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)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(vi) 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.
(vii) 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.
(viii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(ix) 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 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.
For Spartan New York Intermediate's limitations on futures and
options transactions, see the section entitled "Limitations on Futures and
Options Transactions" on page 7.
INVESTMENT LIMITATIONS OF SPARTAN NEW YORK MUNICIPAL INCOME FUND
( SPARTAN NEW YORK INCOME )
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as 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; ) or,
(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) 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) To meet federal tax requirements for qualification as a "regulated
investment company," the fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(ii) 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) if, as a result, the fund would hold more
than 10% of the outstanding voting securities of that issuer.
(iii) 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.
(iv) 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.
(v) 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)). The fund will not
purchase any security while borrowings presenting more than 5% of its total
assets are outstanding. The fund will not borrow from other funds advised
by FMR or its affiliates if total outstanding borrowings immediately after
such borrowing would exceed 15% of the fund's total assets.
(vi) 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.
(vii) 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.
(viii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(ix) 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 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.
For the Spartan New York Income's fund's limitations on futures and
options transactions, see the section entitled "Limitations on Futures and
Options Transactions" on page 7.
Each fund's investments must be consistent with its investment objective
and policies. Accordingly, not all of the security types and investment
techniques discussed below are eligible investments for each of the funds.
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 Investment Company Act of 1940. These
transactions may include 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.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by a fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered. The bond
funds may receive fees for entering into delayed-delivery transactions.
When purchasing securities on a delayed-delivery basis, each fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If a fund remains substantially fully
invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When a fund has sold a security on a delayed-delivery
basis, 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, the fund could miss
a favorable price or yield opportunity, or could suffer a loss.
Each fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
FEDERALLY TAXABLE OBLIGATIONS. Under normal conditions, the funds do not
intend to invest in securities whose interest is federally taxable.
However, from time to time on a temporary basis, each fund may invest a
portion of its assets in fixed-income obligations whose interest is subject
to federal income tax.
Should a fund invest in federally taxable obligations, it would purchase
securities that, in FMR's judgment, are of high quality. These obligations
would include those issued or guaranteed by the U.S. government or its
agencies or instrumentalities and repurchase agreements backed by such
obligations.
Should a fund invest in federally taxable obligations, it would purchase
securities that in FMR's judgment are of high quality. These would include
obligations issued or guaranteed by the U.S. government or its agencies or
instrumentalities; obligations of domestic banks; and repurchase
agreements. The bond funds' standards for high-quality, taxable
obligations are essentially the same as those described by Moody's
Investors Service, Inc. (Moody's) in rating corporate obligations within
its two highest ratings of Prime-1 and Prime-2, and those described by
Standard & Poor's (S&P) in rating corporate obligations within its two
highest ratings of A-1 and A-2. The money market fund will purchase
taxable obligations only if they meet its quality requirements.
Proposals to restrict or eliminate the federal income tax exemption for
interest on municipal obligations are introduced before Congress from time
to time. Proposals also may be introduced before the New York legislature
that would affect the state tax treatment of the funds' distributions. If
such proposals were enacted, the availability of municipal obligations and
the value of the funds' holdings would be affected and the Trustees would
reevaluate the funds' investment objectives and policies.
FUTURES AND OPTIONS. The following sections pertain to futures
and options: Asset Coverage for Futures and Options Positions, 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.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The funds will comply
with guidelines established by the Securities and Exchange Commission with
respect to coverage of options and futures strategies by mutual funds, and
if the guidelines so require , will set aside appropriate liquid
assets in a segregated custodial account in the amount prescribed.
Securities held in a segregated account cannot be sold while the futures or
option strategy is outstanding, unless they are replaced with other
suitable assets. As a result, there is a possibility that segregation of a
large percentage of a fund's assets could impede portfolio management or
the fund's ability to meet redemption requests or other current
obligations.
COMBINED POSITIONS. A fund may purchase and write 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, a fund may purchase a put option and write a call option on the
same underlying instrument, in order to 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, in order 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. The funds may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which they typically
invest, which involves a risk that the options or futures position will not
track the performance of a 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. When a fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
a fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters 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. Each 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 funds intend to comply with Rule 4.5 under the
Commodity Exchange Act, which limits the extent to which the funds can
commit assets to initial margin deposits and option premiums.
In addition, each 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 funds' investments in futures contracts and
options, and the funds' policies regarding futures contracts and options
discussed elsewhere in this Statement of Additional Information, 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 for a fund 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 funds 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, a fund 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 fund 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 fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. A fund 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
paid, 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. When a fund writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, the fund 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. When writing an option on a futures
contract, the fund will be required to make margin payments to an FCM as
described above for futures contracts. A fund may seek to terminate its
position in a put option it writes 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 the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
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 a fund 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 INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. 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 instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
For the money market fund, FMR may determine some restricted securities and
municipal lease obligations to be illiquid.
For the bond funds, investments currently considered to be illiquid include
over-the-counter options. Also, FMR may determine some restricted
securities and municipal lease obligations to be illiquid. However, with
respect to over-the-counter options a fund writes, all or a portion of the
value of the underlying instrument may be illiquid depending on the assets
held to cover the option and the nature and terms of any agreement the fund
may have to close out the option before expiration.
In the absence of market quotations, illiquid investments for the money
market fund are valued for purposes of monitoring amortized cost valuation,
and for the bond funds are priced at fair value as determined in good faith
by a committee appointed by the Board of Trustees. If through a change in
values, net assets, or other circumstances, a fund were in a position where
more than 10% of its net assets was invested in illiquid securities, it
would seek to take appropriate steps to protect liquidity.
INDEXED SECURITIES. A fund may purchase securities 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. One example of indexed securities is inverse floaters.
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. At the same time,
indexed securities are subject to the credit risks associated with the
issuer of the security, and their values may decline substantially if the
issuer's creditworthiness deteriorates. Indexed securities may be more
volatile than the underlying instruments.
INTERFUND BORROWING PROGRAM. Pursuant to an exemptive order issued by the
SEC, each fund has received permission to lend money to, and borrow money
from, other funds advised by FMR or its affiliates, but will participate in
the interfund borrowing program only as a borrower. Interfund borrowings
normally extend overnight, but can have a maximum duration of seven days. A
fund will borrow through the program only when the costs are equal to or
lower than the costs of bank loans. Loans may be called on one day's
notice, and 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 prevailing short-term interest rate levels - rising
when prevailing short-term interest rates fall, and vice versa. This
interest rate feature can make the prices of inverse floaters considerably
more volatile than bonds with comparable maturities.
LOWER-QUALITY MUNICIPAL SECURITIES. The bond funds may invest a portion of
their assets in lower-quality municipal securities as described in the
Prospectus.
While the market for New York municipals is considered to be substantial,
adverse publicity and changing investor perceptions may affect the ability
of outside pricing services used by a fund to value its portfolio
securities, and the fund's ability to dispose of lower-quality bonds. The
outside pricing services are monitored by FMR and reported to the Board to
determine whether the services are furnishing prices that accurately
reflect fair value. The impact of changing investor perceptions may be
especially pronounced in markets where municipal securities are thinly
traded.
Each fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise 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.
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. 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
the money market fund to maintain a stable net asset value per share.
MONEY MARKET SECURITIES are high-quality, short-term obligations.
Some money market securities employ a trust or other similar structure to
modify the maturity, price characteristics, or quality of financial assets.
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 the structure does not perform 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 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 SECTORS:
TRANSPORTATION. Transportation debt may be issued to finance the
construction of airports, toll roads, highways, or other transit
facilities. Airport bonds are dependent on the general stability of the
airline industry and on the stability of a specific carrier who uses the
airport as a hub. Air traffic generally follows broader economic trends and
is also affected by the price and availability of fuel. Toll road bonds are
also affected by the cost and availability of fuel as well as toll levels,
the presence of competing roads and the general economic health of an area.
Fuel costs and availability also affect other transportation-related
securities, as do the presence of alternate forms of transportation, such
as public transportation.
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, the funds will not
hold such 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 a fund a specified,
undivided interest in the obligation in proportion to its purchased
interest in the total amount of the obligation.
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.
PUT FEATURES entitle the holder to sell a security back to the issuer or a
third party at any time or at specified intervals. They 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.
QUALITY AND MATURITY (MONEY MARKET FUND ONLY). Pursuant to procedures
adopted by the Board of Trustees, the fund may purchase only high-quality
securities that FMR believes present minimal credit risks. To be considered
high-quality, a security must be rated in accordance with applicable rules
in one of the two highest categories for short-term securities by at least
two nationally recognized rating services (or by one, if only one rating
service has rated the security); or, if unrated, judged to be of equivalent
quality by FMR.
High-quality securities are divided into "first tier" and "second tier"
securities. First tier securities are those deemed to be in the highest
rating category (e.g., Standard & Poor's A-1 or SP-1), and second tier
securities are those deemed to be in the second highest rating category
(e.g., Standard & Poor's A-2 or SP-2).
The fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a dollar-weighted
average maturity of 90 days or less. When determining the maturity of a
security, the fund may look to an interest rate reset or demand feature.
REFUNDING CONTRACTS. A fund may purchase securities on a when-issued basis
in connection with the refinancing of an issuer's outstanding indebtedness.
Refunding contracts require the issuer to sell and the fund 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 fund generally will
not be obligated to pay the full purchase price if it fails to perform
under a refunding contract. Instead, refunding contracts generally provide
for payment of liquidated damages to the issuer (currently 15-20% of the
purchase price). A fund 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. When required by
SEC guidelines, a fund will place liquid assets in a segregated custodial
account equal in amount to its obligations under refunding contracts.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits 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 . To protect the
fund from the risk that the original seller will not fulfill its
obligation, the securities are held in an account of the fund at a bank,
marked-to-market daily, and maintained at a value at least equal to the
sale price plus the accrued incremental amount. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility that the value of the underlying security
will be less than the resale price, as well as delays and costs to a fund
in connection with bankruptcy proceedings), it is each fund's current
policy to engage in repurchase agreement transactions with parties whose
creditworthiness has been reviewed and found satisfactory by FMR.
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, a fund 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, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security. However, in general, the money market fund anticipates
holding restricted securities to maturity or selling them in an exempt
transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of the fund's assets and may be
viewed as a form of leverage.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation
of the credit of a bank or another entity in determining whether to
purchase a security supported by a letter of credit guarantee, insurance or
other source of credit or liquidity.
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 . Each 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
support 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
marketable by the funds; and the possibility that the maturities of the
underlying securities may be different from those of the commitments.
TENDER OPTION BONDS are created by coupling an intermediate- or long-term,
fixed-rate, tax-exempt 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 for the funds, 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 of 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 have put features.
ZERO COUPON BONDS do not make regular interest payments. Instead, they are
sold at a deep 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 very volatile when interest rates change. In
calculating its daily dividend, a fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value.
SPECIAL CONSIDERATIONS AFFECTING NEW YORK
The financial condition of the State of New York (the State), its public
authorities and public benefit corporations (the Authorities), and its
local governments, particularly The City of New York (the City), could
affect the market values and marketability of, and therefore the net asset
value per share and the interest income of, the funds, or result in the
default of existing obligations, including obligations which may be held by
the funds. The following section provides only a brief summary of the
complex factors affecting the financial situation in New York and is based
on information obtained from the State, certain of its Authorities, the
City and certain other localities, as publicly available on the date of
this Statement of Additional Information. The information contained in such
publicly available documents has not been independently verified. It should
be noted that the creditworthiness of obligations issued by local issuers
may be unrelated to the creditworthiness of the State, and that there is no
obligation on the part of the State to make payment on such local
obligations in the event of default in the absence of a specific guarantee
or pledge provided by the State.
The State and the City have experienced serious financial difficulties and
have each experienced recent declines in their credit standings. Standard &
Poor's Corporation (S&P) and Moody's Investors Service Inc.
(Moody's) have each assigned ratings for the State's general
obligation bonds that are among the three lowest of those states with rated
general obligation bonds. S&P and Moody's have each assigned ratings for
the City's obligations that are among the four lowest of those cities with
rated general obligations bonds. The ratings of certain related debt of
other issuers for which the State has an outstanding moral obligation,
lease purchase, guarantee or other contractual obligation are generally
linked directly to the State's rating. Should the financial condition of
the State, its Authorities, or its local governments deteriorate, their
respective credit ratings could be further reduced, and the market value
and marketability of their outstanding notes and bonds could be adversely
affected, and their respective access to the public credit markets
jeopardized.
ECONOMIC FACTORS. New York is the third most populous state, and has a
relatively high level of personal wealth. However, the State economy has
grown more slowly than that of the nation as a whole, resulting in the
gradual erosion of its relative economic affluence (due to factors such as
relative costs for taxes, labor, and energy). The State's economy is
diverse, with a comparatively large share of the nation's financial,
insurance, transportation, communications and service employment, and a
very small share of the nation's farming and mining activity. New York has
a declining proportion of its workforce engaged in manufacturing and
increasing proportion engaged in service industries. The State, therefore
is likely to be less affected than the nation as a whole during an economic
recession concentrated in construction and manufacturing sectors of the
economy, but likely to be more affected during a recession concentrated in
the service-producing sector. The State's manufacturing and maritime base
have been seriously eroded, as illustrated by the decline of the steel
industry in the Buffalo area and of the apparel and textile industries in
the City. In addition, the City experienced substantial socio-economic
changes, as a large segment of its population and a significant share of
corporate headquarters and other businesses relocated (many out-of-state).
Both the State and the City experienced substantial revenue increases in
the mid-1980s attributable directly (corporate income and financial
corporations taxes) and indirectly (personal income and a variety of other
taxes) to growth in new jobs, rising profits, and capital appreciation
derived from the finance sector of the City's economy. From 1977 to its
1988 peak, the finance, insurance, and real estate sectors rose 55%, to
account in 1988 for 23% of total earnings in the City and 14% statewide
(compared to 7% nationwide). The finance sector's growth was a catalyst for
the New York metropolitan region's related business and professional
services, retail trade and residential and commercial real estate markets.
The then rising real estate market contributed to City revenues, as higher
property values and new construction added to collections from property
taxes, mortgage recording, and transfer taxes and sales taxes on building
materials. The boom on Wall Street more than compensated for the continued
erosion of the State's (and the City's) manufacturing and maritime base,
since average wages in finance and related business and professional
services were substantially higher (thereby providing a net increase of
higher incomes, taxed at even higher marginal rates).
Although the national economy began to expand in 1991, the State economy
remained in recession until 1993, when employment growth resumed.
E mployment growth has been hindered during recent years by
significant cut backs in the computer and instrument manufacturing, utility
and defense industries. Personal income increased substantially in 1992 and
1993 and the state's economy entered the third year of slow recovery in
1995. According to assumptions contained in the State financial plan
issued on June 20, 1995 (the "1995-96 S tate F inancial
P lan") , e mployment is expected to grow slightly during
1995, although the rate of increase is expected to be below the experience
of the 1980's due to cutbacks in federal spending and employment, as well
as continued corporate downsizing. The Mid-Year update to the 1995-96
State Financial Plan issued on October 25, 1995 (the "mid-year update")
contains a marginally weaker economic forecast than that contained in the
initial 1995-96 State Financial Plan, and predicts a significant slowing of
state employment growth during calendar year 1996, due to the forecasted
slackening pace of national economic growth, industry consolidation and
governmental employment.
Notwithstanding the State budget for FY 1995-96 which enacts significant
tax and program reductions, the State can expect to confront structural
deficit in future years. The 1995 State Financial Plan, in part, reflects
actions which provide nonrecurring measures (sometimes referred to as "one
shots") variously estimated to provide $900 million to $1.0 billion of
savings. Additionally the three-year plan to reduce State personal income
taxes will decrease State tax receipts by an estimated $l.7 billion in FY
1996-97. Similarly, other actions taken to reduce disbursements, such as
reductions in the State workforce and Medicaid and welfare expenditures,
are expected to provide greater reductions in future fiscal years. The net
impact of these and other factors is expected to produce a potential
imbalance in receipts and disbursements for States FY 1996-97 and future
fiscal years.
Further, there can be no assurance, however, that the State economy will
not experience worse-than-predicted results in the 1994-95 and 1995-96
fiscal years with corresponding material and adverse effects on the State's
projections of receipts and disbursements. Although the Mid-Year Update
(Third-quarter Update) projects a continued balance in the 1995-1996 State
Financial Plan, downward revisions have been made to the estimates of both
receipts and disbursements. As the State Financial Plan and the updates
thereto are based upon forecasts of national and State economic
activity, uncertainties exist in such forecasts, including federal
financial and monetary policies, the availability of credit and the
condition of the world economy. In addition, the economic and financial
condition of the State may be affected by various financial, social,
economic and political factors. These factors can be complex, may vary from
year to year and are frequently the results of actions taken not only by
the State and its agencies and instrumentalities, but also by other
entities, such as the federal government, that are not under the control of
the State.
The fiscal health of the State may also be impacted by the fiscal health of
the City. Although the City has had a balanced budget since 1981, estimates
of the City's future revenues and expenditures are subject to various
uncertainties. For example, the effects of the October 1987 stock market
crash and 1990-92 national recession have had a disproportionately adverse
impact on the New York C ity metropolitan region, as private sector
job losses since 1989 have offset all the prior employment gains of the
1980s. Declines in both employment and earnings in the finance sector
contributed to declines in retail sales and real estate values. In
addition, a number of widely publicized bankruptcies among highly leveraged
retailing, brokerage and real estate development companies occurred. The
effects of the recession have extended to banking, insurance, business
services (such as law, accounting and advertising), publishing and
communications. Factors which may inhibit the City's economic recovery
include (i) credit restraints imposed by the weak financial condition of
several major money center banks located in the City; (ii) increases in
combined State and local tax burdens, if uncompetitive tax rates are
imposed; (iii) perceived declines in the quality of life attributable to
service reductions and the deterioration of the City's infrastructure; (iv)
additional employment losses in the City's banking sector or corporate
headquarters complex due to further corporate relocations or
restructurings; or (v) increased expenditures for public health assistance
and care. The City's future economic condition will also likely be affected
by its competitive position as a world financial center (compared to
London, Tokyo, Frankfurt, and competing regional U.S. centers). Investors
should also note that the budget for the City FY1995-96 addresses a
projected $2.7 billion budget gap. Most of the budget-gap closing
initiatives may be implemented only with the cooperation of the City's
municipal unions, or the State or Federal governments. No assurance can be
given that such initiatives will be successfully undertaken.
While the State's economy is broader-based than that of the City,
particular industries are concentrated in and have a disproportionate
impact on certain areas, such as aerospace in Long Island, heavy industry
in Buffalo, photographic and optical equipment in Rochester, machinery and
transportation equipment in Syracuse and Utica-Rome, computers in
Binghamton and in the Mid-Hudson Valley, and electrical equipment in the
Albany-Troy-Schenectedy area. Constraints on economic growth, taxpayer
resistance to proposed substantial increases in local tax rates, and
reductions in State aid in regions apart from the City have contributed to
financial difficulties for several county and other local governments.
THE STATE. As noted above, the financial condition of the State is affected
by several factors, including the strength of the State and its regional
economies, actions of the federal government, and State actions affecting
the level of receipts and disbursements. Owing to these and other factors,
the State may, in future years, face substantial potential budget gaps
resulting from a significant disparity between tax revenues projected from
a lower recurring receipts base and the future costs of maintaining State
programs at current levels. The State has been experiencing and
continues to experience substantial financial difficulties with General
Fund (the principal operating account) deficits incurred during the fiscal
years 1989-1990 through 1991-1992. The State's accumulated General Fund
deficit (on a GAAP basis) grew 91% from FY1986-87 to FY1990-91, and reached
a then-record $6.265 billion (audited) by March 31, 1991. An accumulated
General Fund deficit at March 31, 1993 was restated to be $2.551 billion.
The State ended its 1993-94 fiscal year with a negative fund balance of
$1.637 billion. This represented an improvement over prior years, primarily
due to an improving national and State economy resulting in
higher-than-expected receipts from personal income tax and various business
taxes and the relative success of the New York Local Government Assistance
Corporation ("LGAC"). The General Fund showed an operating surplus of $914
million (on a GAAP basis). The State's 1994-95 fiscal year budget was
adopted on June 8, 1994, more than two months after the beginning of the
State's fiscal year ; The Governor released his proposed budget for
FY1996-97 on December 15, 1995 (the "1996-97 Executive Budget") 30 days in
advance of the constitutionally-mandated release date. The 1996-97
Executive Budget projects a $3.9 billion budget gap, which it proposes to
close largely by Medicaid cost containment measures (approximately $1.0
billion), welfare reform (approximately $240 million) and restructuring of
the state healthcare delivery system (approximately $470 million). The
phased reduction of the State's personal income tax is continued in the
1996-97 Executive Budget. There are risks and uncertainties concerning
whether or not certain tax and spending cuts included in the FY1995-96
budget as adopted will be upheld if challenged in the courts. For example,
the State Comptroller is challenging the proposed use of certain pension
reserves. If such suit is successful, approximately $110 million would
become unavailable as a source of contribution to the balanced State
budget. Finding an additional $110 million in reductions or from other
sources may prove difficult. Additionally, even if all such tax and
spending cuts are successfully implemented, resulting in a balanced budget
for FY1995-96, there can be no assurance that the State will not face
budget gaps in future years, resulting from a disparity between tax
revenues projected from a lower recurring-receipts base and the spending
required to maintain State programs at current levels. Furthermore, the
State is a party to numerous lawsuits in which an adverse decision could
require extraordinary expenditures. Certain major budgetary considerations
affecting the State are outlined below.
REVENUE BASE. The State's principal revenue sources are economically
sensitive, and include the personal income tax (57% of estimated FY1995-96
General Fund tax receipts), and user taxes and fees (20% of FY1994-95
and nearly 21% of estimated FY1995-96 General Fund tax receipts,
respectively. Uncertainties in taxpayer behavior as a result of actual
and proposed changes in Federal tax law also can have an adverse impact on
State tax receipts. One-fourth of the 4% State sales tax has been dedicated
to pay debt service of the LGAC, and has correspondingly reduced General
Fund receipts. To the extent those mon ies are not necessary for
payment to LGAC, they are transferred from the LGAC Tax Fund to the General
Fund and reported as a transfer from other funds rather than as sales and
use tax receipts. During fiscal years 1991-92, 1992-93 , 1993-94 and
1994-95 mon ies were so transferred. $1.3 billion is recommended to
be transferred from the LGAC Tax Fund to the General Fund in fiscal year
1994-95. Capital gains are a significant component of income tax
collections. Auto sales and building materials are significant components
of retail sales tax collections. Tax rates are relatively high and may
impose political and economic constraints on the ability of the State to
further increase its taxes. State legislation enacted in 1995 is
designed to reduce, by 20% over three years, receipts from the personal
income tax. This tax-reduction program is estimated to reduce receipts by
$515 million in FY1995-96, $2.2 billion in FY1996-97 and to produce further
significant reductions in FY 1997-98. In addition to such reductions in
overall tax rates, the tax-reduction program also includes other
modifications to the tax laws which will have the effect of lowering the
amount of tax revenues to be received by the State. In the absence of
countervailing economic growth or expenditure cuts the tax cuts could
make the achievement of a balanced State budget more difficult in future
years. A significant risk to the 1995-96 State Financial Plan arises from
tax legislation pending in the U.S. Congress. Changes to the federal tax
treatment of capital gains, if made, are likely to flow automatically to
the State personal income tax. Such changes, depending upon their precise
character and timing, as well as taxpayer response, could produce either
revenue gain or loss during the remainder of the State's 1995-96 fiscal
year.
STATE DEBT. The State has the heaviest debt burden of any state (with
nearly $5.2 billion of long-term general obligation and $ 18 billion
of lease-purchase or other contractual debt outstanding as of March 31,
1995), and debt service costs absorb a large share of the State's budget.
As of March 31, 1995 the State is also obligated with respect to nearly
$7.2 billion for statutory moral obligations for nine of its Authorities
and for guarantees of $358 million of other Authority debt.
Historically, the State ha d one of the largest seasonal
financing requirements of any municipal issuer, and was required
each spring to borrow substantial sums from public credit markets to
finance its accumulated General Fund deficit and its scheduled payments of
aid to local governments and school districts. To help reduce such
seasonal borrowings, the state created LGAC as a financing vehicle to
finance the State's local assistance payments by issuing long-term debt,
payable over 30 years from a portion of the State sales tax as discussed
above. As of June, 1995, LGAC had issued its bonds and notes to provide net
proceeds of $4.7 billion, thus completing the LGAC program. The impact of
LGAC's borrowing is that the state was able to meet its cash flow needs in
the first quarter of FY1995-96 without relying on short-term seasonal
borrowings. Neither the 1995-96 State Financial Plan nor the 1994-95 State
Financial Plan included a spring borrowing, the first time in 35 years that
there was no such short-term borrowing. Investors should note that t he
enabling legislation for LGAC contains a covenant restricting the amount of
the S tate's s pring b orrowing, which may reduce the
State's fiscal flexibility in future fiscal years.
BUDGETARY FLEXIBILITY. A significant portion of the State's General Fund
budget is accounted for by contractually required expenses (such as pension
and debt service costs) and by federally mandated programs (such as AFDC
and Medicaid). In addition, State aid for school districts comprises
a major share of the budget, and total appropriations and distribution of
such aid is especially contentious politically. Furthermore, the State's
ability to respond to unanticipated developments in the future may have
been impaired since the State has utilized a substantial range of actions
of a non-recurring nature in recent years to finance its General
F und operations, including tapping excess monies in special funds,
refinancing outstanding debt to reduce reserve fund requirements and
current (but not long-term) debt service costs, recalculating pension fund
contributions, selling State assets, reimbursing past General Fund
expenditures by the issuance of authority debt and deferring payment for
expenditures to future fiscal years. The 199 5 -9 6 State
F inancial P lan contain s actions of a non-recurring
nature including mergers of certain State Authorities, payment for the
sale of certain State assets and payments associated with the resolution of
certain court cases, totalling approximately $900 million to $1 billion.
The 1996-97 Executive Budget, however, contains actions of a non-recurring
nature only to the extent of approximately $123 million.
LABOR COSTS. The State government workforce is mostly unionized, subject to
the Taylor Law which authorizes collective bargaining and prohibits (but
has not historically prevented) strikes and work slowdowns. Costs
for employee health benefits have increased substantially, and can be
expected to further increase. The State has a substantial unfunded
liability for future pension benefits, and has utilized changes in its
pension fund investment return assumptions to reduce current contribution
requirements. If such investment earnings assumptions are not
sustained by actual results, additional State contributions will be
required in future years to meet the State's contractual obligations. The
State's change in actuarial method from the aggregate cost method to a
modified projected unit credit method in the 1990-91 fiscal year created a
substantial surplus that was amortized and applied to offset the State's
contribution through the 1993-94 fiscal year. This change in actuarial
method was ruled unconstitutional by the State's highest court and the
State return ed to the aggregate cost method in fiscal year 1994-95
using a four-year phase-in. Employer contributions, including the State's,
are expected to increase over the next five to ten years.
PUBLIC ASSISTANCE. The State has the second largest number of
persons receiving public assistance (AFDC and Home Relief) of any state.
AFDC costs are shared among the federal government, the State and its
counties (including the City) by statutory formula. Caseloads tend
to rise significantly during economic downturns, but have fallen only in
the later stages of past economic recoveries.
MEDICAID. The State participates in the federal Medicaid program under a
state plan approved by the Health Care Financing Administration. The
federal government provides a substantial portion of eligible
program costs, with the remainder shared by the State and its counties
(including the City). Basic program eligibility and benefits are determined
by federal guidelines, but the State provides a number of optional benefits
and expanded eligibility. Program costs have increased substantially in
recent years, and account for a rising share of the State budget. Federal
law requires the State to adopt reimbursement rates for hospitals and
nursing homes that are reasonable and adequate to meet the costs that must
be incurred by efficiently and economically operated facilities in
providing patient care, a standard that has led to past litigation by
hospitals and nursing homes seeking higher reimbursement from the State.
The budget adopted for FY1995-96, and in particular, the 1996-97
Executive Budget, each include reductions in spending for Medicaid
Cutbacks in State spending for Medicaid may adversely affect the
financial condition of hospitals and health care institutions that are the
obligors of bonds that may be held by the funds.
THE STATE AUTHORITIES. The State's Authorities are not subject to the
constitutional restrictions on the incurrence of debt which apply to the
State itself, and may issue bonds and notes within the amounts of, and as
otherwise restricted by, their legislative authorization ; the State
ended its FY1994-95 reporting a general fund operating deficit of $1.426
billion, primarily due to changes in accounting methodologies used by the
State Comptroller and the use of $1.026 billion of the FY 1993-94 cash
surplus to fund operating expenses in FY 1994-95. These factors were offset
by net proceeds of $315 million of bonds issued by LGAC. Actual receipted
reported fell short of original projections, primarily in the categories of
business taxes. These shortfalls were offset by better than expected
performance in the remaining taxes, principally the user taxes and fees.
Total expenditures for FY 1994-95 increased $2.083 billion, or 6.7% over
the prior fiscal year. On June 7, 1995, the New York State legislature
passed the final legislation regarding the State's FY 1995-96 budget. Both
the enacted budget bills and the State Financial Plan for 1995-96 include
the reductions in the actual level of spending from that which occurred in
FY1994-95 and project reductions in Medicaid and State Authority operating
costs. The FY1995-96 budget also projects an approximate increase of 3% in
all governmental funds over the amounts received in FY1994-95 and includes
the phase-in of a three-year reduction in the State's personal income tax.
The New York State Public Authorities Control Board approve d the
issuance of debt and major contracts by ten of the Authorities. As of
September 30, 199 4 (the date of the latest data available) , there
were 18 Authorities that had outstanding debt of $100 million or more, the
aggregate debt of which (including refunding bonds and moral obligation,
lease-purchase, contractual obligation, or State-guaranteed debt) then
totaled approximately $63.5 billion. As of March 31, 1994, aggregate public
authority debt outstanding as State-supported debt was $ 36 .1 billion
and State-related debt was $2 7 . 9 billion. In recent years the
State has provided financial assistance through appropriations, in some
cases of a recurring nature, to certain Authorities for operating and other
expenses and, (from 1976 to 1987) in fulfillment of its commitments on
moral obligation indebtedness or otherwise, for debt service. The State has
budgeted operating assistance of approximately $ 70 .3 billion for the
Metropolitan Transportation Authority (MTA) for fiscal year 1994-95 and
estimates total assistance in FY 1995-96 to be approximately 1.1 billion.
This assistance is expected to continue to be required (and may
increase) in future years. Failure by the State to appropriate
necessary amounts or to take other action to permit the Authorities to meet
their obligations could adversely affect the ability of the State and the
Authorities to obtain financing in the public credit markets and the market
price of the State's outstanding bonds and notes.
The MTA, whose credit standing was recently reduced, oversees the operation
of the City's subway and bus lines by its affiliates, the New York City
Transit Authority and the Manhattan and Bronx Surface Transit Operating
Authority (collectively, the TA). MTA subsidiaries operate certain commuter
rail and bus lines in the New York metropolitan area. An affiliated
agency, the Triborough Bridge and Tunnel Authority (TBTA), operates certain
intrastate toll bridges and tunnels. To maintain its facilities and
equipment, which deteriorated significantly in the late 1970s due to
deferred maintenance, the MTA prepares a five-year capital program subject
to approval by the MTA Capital Program Review Board. In April 1993,
the State legislature authorized the funding of a portion of a five year
$9.56 billion capital plan for the MTA for 1992 through 1996. MTA's five
year capital program for 1992-96 was approved by the State capital program
review board in December 1993. There can be no assurance that all
governmental actions for the 1992-96 capital program will be taken, that
funding sources currently identified will not be decreased or eliminated,
or that the capital program will not be delayed or reduced. If the capital
program is delayed or reduced, ridership and fare revenues may decline,
which could impair the MTA's ability to meet its operating expenses without
additional State assistance. There can be no assurance that any such
assistance will continue at any particular level or in any fixed
relationship to the operating costs and capital needs of the MTA.
THE CITY. In the early 1970s, the City incurred substantial
operating deficits, and its financial controls, accounting practices, and
disclosure policies were widely criticized. In 1975, the City
encountered severe financial difficulties and lost access to the public
credit markets. The State Legislature responded in 1975 by creating
the Municipal Assistance Corporation For The City of New York (MAC) to
provide financing assistance for the City and the Financial Control Board
to exercise certain oversight and review functions with respect to the
City's finances. The Financial Control Board's powers over the City
were suspended in June 1986, but would be reinstated (under current law) if
the City experiences certain adverse financial circumstances. At the time
of the fiscal crisis, the State provided substantial financial assistance
to the City, the federal government provided the City with direct seasonal
loans and guarantees on the City's long-term debt, and the City's labor
unions accepted deferrals of wage increases and approved purchases of City
bonds by the pension funds. No assurance can be given that similar
assistance would again be made available if needed, particularly given the
current budgetary constraints faced by both the federal and State
governments.
The City provides services usually undertaken by counties, school districts
or special districts in other large urban areas, including the provision of
social services such as day care, foster care, health care, family
planning, services for the elderly and special employment services for
needy individuals and families who qualify for such assistance. State law
requires the City to allocate a large portion of its total budget to Board
of Education operations, and mandates the City to assume the local share of
public assistance and Medicaid costs. While the city has had GAAP operating
surpluses in recent years, the City has experienced ongoing financial
difficulties; primarily related to the impact of the recent recession on
the local economy (reducing revenues from most major taxes and increasing
public assistance and Medicaid caseloads), rising health care costs for
City employees and for Medicaid, and rising inflation and interest rates.
In response, the City implemented gap-closing programs which initially
relied primarily on actions of a non-recurring nature, but included
substantial property tax rate increases and a personal income tax surcharge
imposed in FY1991 and selected service cutbacks. Reductions in State aid,
larger-than-budgeted labor settlements and increased police expenditures
added to the adverse budgetary impact of the local recession, confronting
the City with a potential $3.3 billion imbalance during FY1992 budget
negotiations. This initial budget gap was closed by adoption of a budget
providing for various tax increases and significant service reductions. Aid
to nonprofit cultural institutions in the City was significantly reduced
(as was State aid to such institutions), including certain institutions
that are obligors of bonds that may be held by the funds.
The City's budget for fiscal year 1994 identified measures to close a $300
million budget gap, which was the result of shortfalls in federal and State
aid from previously projected levels. The City achieved balanced operating
results as reported in accordance with GAAP for the 1994 fiscal year.
For the 1995 fiscal year, the city adopted a budget which halted the trend
in recent years of substantial increase in city funded spending from one
year to the next, and the City budget adopted for the 1996 fiscal year
reduces city funded spending for a second consecutive year. The mayor
is responsible for preparing the City's four-year financial plan. The
City's 199 6 -199 9 financial plan (the 1996-1999 City
Financial Plan) contains numerous assumptions concerning factors which
may impact the City's budget such as: the timing and pace of a regional and
local economic recovery, increases in interest rates, the impact on real
estate tax revenues of the current downturn in the real estate market, wage
increases for city employees consistent with those assumed in the financial
plan, employment growth, the ability to implement proposed reductions in
City personnel and other cost reduction initiatives which may require in
certain cases the cooperation of the City's municipal unions and MAC,
provision of State and federal aid and mandate relief, and the impact on
the New York City region of proposals for federal and state welfare
reform. No assurance can be given that the assumptions used by the
City in the 1996-1999 City Financial Plan will be realized.
Furthermore, actions taken in recent fiscal years to avert deficits may
have reduced the City's flexibility in responding to future budgetary
imbalances, and have deferred certain expenditures to later fiscal years.
The City's original budget for fiscal year 1995 reflected proposed actions
to eliminate a $2.3 billion budget gap. The City submitted on July 21,
1995 a fourth quarter modification to the City's Financial Plan for
FY1994-95 which projects a balanced budget in accordance with GAAP for the
City's FY1994-1995. On July 11, 1995, the City submitted the 1996-1999
Financial Plan, which is based on the City's expense and capital budgets
for the City's FY1995-96 adopted on June 14, 1995 (the 1995 City Budget).
The 1996 City Budget sets forth proposed actions by the City for FY1995-96
to close a substantial projected budget gap (approximately $3.1 billion)
resulting from lower than projected tax receipts and other revenues and
greater than projected expenditures. Proposed actions in the 1996-1999 City
Financial Plan for The City's FY1995-96 include a reduction of
approximately $400 million primarily affecting public assistance and
Medicaid payments by the City, expenditure reductions in agencies totalling
approximately $1.2 billion and transitional labor savings of approximately
$600 million. These and other proposed actions were contained in the City
1996-1999 Financial Plan as well as the 1996 City Budget. The Budget is
subject to the ability of the City to implement the reductions in
expenditures, personal services and personnel, which are substantial and
may be difficult to implement. For example one of the key items contained
in the 1996 City Budget is the sale of the City's water system for
approximately $2.3 billion. This plan has been hotly contested since it was
announced, and is currently the focus of several lawsuits. In November, the
Mayor sued the City Comptroller to compel his signature on bonds needed to
accomplish the sale of the water system. The Comptroller had blocked the
bond sale, stating the the sale of City water assets would be illegal and
"an improvident fiscal gimmick." In December, a coalition of civic, housing
and environmental groups from New York City and Westchester County (the
"Coalition") filed suit to block the Mayor's plan to sell the Water System
and announced an intention to join in the Comptroller's battle to block the
bond sale. In addition, certain proposals may be offset by various State
and federal legislation which could mandate levels of City funding
inconsistent with the 1996 City Budget and the 1996-1999 City Financial
Plan. In addition, the 1996-1999 City Financial Plan anticipates the
receipt of substantial amounts of Federal aid. Certain proposed State and
federal actions are subject to legislative, the governor's and the
president's approvals, as applicable. Both federal and State actions are
uncertain, certain legislative proposals contemplate significant reductions
in federal spending, including proposed federal welfare reform which could
result in caps on, or block grants of, federal programs. Further, no
assurance can be given that either such actions will in fact be taken or
that the projected savings will result even if such actions are taken.
The City derives its revenues from a variety of local taxes, user charges,
miscellaneous revenues and federal and State unrestricted and categorical
grants. The City projects that local revenues will provide approximately
6 8 .0% of total revenues in fiscal year 199 6 while federal
aid, including categorical grants, will provide 12.3% in fiscal year
199 6 and State aid, including unrestricted aid and categorical
grants, will provide 11 . 7 % in fiscal year 199 6 . As a
proportion of total revenues, State aid has remained relatively constant
over the period from 1980 to 1990, while federal aid was sharply reduced
(having provided nearly 20% of total fiscal year 1980 revenues). The
largest source of the City's revenues is the real estate tax (approximately
22% of total projected revenues for fiscal year 199 6 ), at
rates levied by the City council (subject to certain State constitutional
limits). State legislation requires that increases in assessments of
certain classes of real property be phased-in over a five-year period;
thus, property owners may receive higher assessments when property values
are declining. However, in the event of a reduction in total assessments,
higher tax rates would be required to maintain the same amount of tax
revenue. The City derives the remainder of its tax revenues from a variety
of other economically sensitive local taxes (subject to authorization by
the legislature), including: a local sales and compensating use tax
(primarily dedicated to MAC debt service) imposed in addition to the
State's tax; the personal income tax on City residents and the earnings tax
on non-residents; a general corporation tax; and a financial corporation
tax. High tax burdens in the City impose political and economic constraints
on the ability of the City to increase local tax rates. The City's
financial plans have been the subject of extensive public comment and
criticism, principally questioning the reasonableness of assumptions that
the City will have the capacity to generate sufficient revenues in the
future to provide the level of services contained in the City's financial
plans. On July 10, 1995, S&P lowered the City's credit rating from A- to
BBB+, among the lowest rating of any major city in the country. The rating
agency cited specifically the city budget's reliance on non-recurring
measures to balance the budget for fiscal 1996 without rectifying the
underlying structural problems, its continued optimistic projections of
State and federal aid, and continued high debt levels.
The City is the largest municipal debt issuer in the nation, and has more
than doubled its debt load since the end of FY1988, in large measure to
rehabilitate its extensive, aging physical plant. The City's seasonal
borrowing needs increased significantly during FY1990 and FY1991, largely
due to delayed State aid payments, and totalled $2.25 billion in FY1992,
$1.4 billion in FY1993 , and $1.75 billion in FY1994 , and $2.2
billion in FY 1995. The City's current capital financing program
reflects major reductions in the City's four-year capital plan, which will
reduce future debt service requirements, but may adversely affect the
condition of its deteriorating physical plant. Further, the City's
capital financing program currently contemplates receipt of proceeds of
approximately $1 billion resulting from the sales of the City's Water
System to the Water Board, and proposed to utilize a substantial portion of
such proceeds for capital project improvements. It is not certain that such
proceeds will become available for capital improvements because as
discussed above, both the Comptroller and the Coalition have opposed such
City proposed transfer of the City's Water System.
In November 1993, the voters approved a proposed charter whereby Staten
Island would secede from the City. Staten Island is one of five
counties/boroughs, comprising 4% of the City's population and 19% of its
land area. State law provides a complex mechanism for such secession.
The State Legislature is also considering establishment of a similar
secession mechanism for Queens.
OTHER LOCALITIES. Certain localities in addition to the City could
have financial problems which, if significant, could lead to requests for
additional State assistance during the State's 199 5 -9 6 fiscal
years and thereafter. Fiscal difficulties experienced by the City of
Yonkers, for example, could result in State actions to allocate State
resources in amounts that cannot yet be determined. In the recent past, the
State provided substantial financial assistance to its political
subdivisions, primarily for aid to elementary, secondary and higher
education, medicaid and income maintenance and local transportation
programs. The legislature enacted substantial reductions from
previously budgeted levels of State aid since December 1990. To the extent
the State is constrained by its financial condition, State assistance to
localities may be further reduced, compounding the serious fiscal
constraints already experienced by many local governments. Localities also
face anticipated and potential problems resulting from pending litigation
(including challenges to local property tax assessments), judicial
decisions and socio -economic trends.
SPECIAL CONSIDERATIONS AFFECTING PUERTO RICO
The following highlights some of the more significant financial trends and
problems affecting the Commonwealth of Puerto Rico (the Commonwealth or
Puerto Rico) and is based on information drawn from official statements and
prospectuses relating to the securities offerings of Puerto Rico, its
agencies and instrumentalities, available as of the date of this SAI. FMR
has not independently verified any of the information contained in such
official statements, prospectuses, and other publicly available documents,
but it is not aware of any fact which would render such information
materially inaccurate.
The economy of Puerto Rico is closely integrated with that of the United
States. In fiscal 1994, trade with the United States accounted for
approximately 87% of Puerto Rico's exports and approximately 67% of its
imports. In this regard, Puerto Rico experienced a $4.3 billion positive
adjusted merchandise trade balance in fiscal 1994.
Since fiscal 1985, personal income, both aggregate and per capita, have
increased consistently each fiscal year. In fiscal 1994, aggregate personal
income was $25.7 billion and personal income per capita was $7,047. Gross
domestic product in fiscal year 1991, 1992, 1993, 1994, and 1995 was $22.8
billion, $23.7 billion, $25.2 billion, $26.6 billion, and $28.3 billion,
respectively. For fiscal 1996, an increase in gross product of 2.7% over
fiscal 1995 is forecasted. However, actual growth in the Puerto Rico
economy will depend on several factors, including the state of the U.S.
economy, the exchange rate for the U.S. dollar, increases in exports and
visitors to the Commonwealth, the price stability of oil imports, the level
of federal transfers, and the cost of borrowing. Due to uncertainties with
respect to these factors, there is no assurance that the economy of Puerto
Rico will continue to grow.
Puerto Rico's economy continued to expand throughout the five year period
from fiscal 1990 through fiscal 1994. While trends in the Puerto Rico
economy generally follow those of the United States, Puerto Rico did not
experience a recession in 1991. This was primarily because of low oil
prices, low interest rates, and Puerto Rico's strong manufacturing base,
which has a large component of non-cyclical industries. Other factors in
the continued expansion included Commonwealth-sponsored economic
development programs, stable prices of oil imports, low exchange rates for
the U.S. dollar, the level of federal transfers, and the relatively low
cost of borrowing funds during that period.
Puerto Rico has made marked improvements in fighting unemployment.
Nonetheless, although unemployment is at relatively low historical levels
for the Commonwealth, it remains above the U.S. average. The unemployment
rate declined from 16.0% to 13.8% from fiscal 1994 to fiscal 1995. As of
October 1995, the unemployment rate stood at 15.0%. Despite this relative
downturn, there is a possibility that the unemployment rate will increase
if there are changes in factors that directly impact the economy of Puerto
Rico.
The economy of Puerto Rico has undergone a transformation in the later half
of this century from one centered around agriculture to one dominated by
the manufacturing and service industries. Manufacturing is the cornerstone
of Puerto Rico's economy and accounted for $16.3 billion or 41.5% of gross
domestic product in fiscal 1994. However, manufacturing has experienced a
basic change over the years as a result of the influx of higher wage, high
technology industries such as pharmaceuticals, electronics, computers,
microprocessors, scientific instruments, and high technology machinery. The
service sector, which includes wholesale and retail trade, finance and real
estate, ranks second in its contribution to gross domestic product and is
the economic sector that employs the greatest number of people. In fiscal
1994, the service sector generated $15 billion in gross domestic product
and employed over 478,000 people. The government sector of the Commonwealth
also plays an important role in the economy of the island. In fiscal 1994,
the government accounted for $4.1 billion of Puerto Rico's gross domestic
product and provided 22.2% of total employment. Tourism also contributed
significantly to the island economy and total visitor expenditures amounted
to $1.8 billion in fiscal 1995.
Much of the development of the manufacturing sector of the economy of
Puerto Rico is attributable to federal and Commonwealth tax incentives,
most notably section 936 of the Internal Revenue Code of 1986, as amended
(Section 936), and the Commonwealth's Industrial Incentives Program.
Section 936 currently grants U.S. corporations that meet certain criteria
and elect its application a credit (the Section 936 credit) against their
U.S. corporate income tax on the portion of the tax attributable to (i)
income derived from the active conduct of a trade or business in Puerto
Rico (active business income) or from the sale or exchange of substantially
all of the assets used in the active conduct of such trade or business and
(ii) qualified possession source investment income. The Industrial
Incentives Program, through the 1987 Industrial Incentives Act, grants
corporations engaged in certain qualified activities a fixed 90% exemption
from Commonwealth income and property taxes and a 60% exemption from
municipal license taxes.
Pursuant to amendments to the Internal Revenue Code (the Code) for taxable
years commencing after 1993, two alternative limitations apply to the
Section 936 credit against active business income and sale of assets
income, as previously described. The first option limits the credit against
such income to 40% of the credit allowable previous to the amendments of
1993, with a five-year phase-in period starting at 60% of the current
allowable credit (the Percentage Limitation). The second option limits the
allowable credit to the sum of (i) 60% of qualified compensation paid to
employees (as defined in the Code), (ii) a specified percentage of
depreciation deductions, and (iii) a portion of the Puerto Rico income
taxes paid by the Section 936 corporation, up to a 9% effective tax rate
(the Economic Activity Limitation).
On November 17, 1995, the U.S. Congress adopted, as part of its larger
federal income tax legislative package, a ten-year phase-out of the current
Section 936 credit for companies that are existing credit claimants and the
elimination of the credit for companies establishing new operations in
Puerto Rico and for existing companies that add a substantial new line of
business. The Section 936 credit based on the Economic Activity Limitation
will continue as under current law without change until tax years beginning
in 2002, during which years a corporation's possession business income will
be subject to a cap based on its possession income for an average adjusted
base period. The credit based on the Percentage Limitation will continue as
under current law until tax years beginning in 1998. In that year and
thereafter, the credit based on the Percentage Limitation will be 40%, but
the possession business income will be subject to a cap based on a
corporation's possession income for an average adjusted base period. The
Section 936 credit is eliminated entirely for taxable years beginning in
2006. However, the credit granted to qualified possession source investment
income is eliminated for taxable years beginning after December 31, 1995.
President Clinton vetoed the legislation submitted by the U.S. Congress on
December 7, 1995. The Administration has proposed a modification to the
Section 936 credit that would phase out the credit based on the Percentage
Limitation over a five year period beginning in 1997, retain the credit
based upon the Economic Activity Limitation under current law, allow a
five-year carry forward of excess Section 936 credit based upon the
Economic Activity Limitation, and retain the Section 936 credit granted to
qualified possession source investment income under current law.
The Governor of Puerto Rico has proposed to the U.S. Congress a
modification of the total elimination of the Section 936 credit by offering
qualifying companies the option of the existing Section 936 credit, as
amended by the U.S. House of Representatives proposal, or a new incentive
program, to be available throughout the United States, including Puerto
Rico. The proposal would provide such companies a credit based on
qualifying wages paid, other wage-related expenses such as fringe benefits,
depreciation expenses for certain tangible assets, research and development
expenses, and passive investment income from qualifying investments in the
subject jurisdiction, so long as the company's employees are in an
"economically developing" jurisdiction in which prevailing per capita
income is substantially below the national average, among other things. The
credit granted to qualifying companies would continue in effect until the
jurisdiction shows, among other things, substantial economic improvement in
terms of the specified economic parameters. The Governor's proposal is not
currently included in either the legislation adopted by the U.S. Congress
on November 17, 1995 or in the Administration's proposal. It is not
possible at this time to determine the final legislative changes that may
be made to Section 936 or the effect that this will have on the long-term
outlook for the economy of Puerto Rico.
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 fund's
management contract. In the case of Spartan New York Money Market, F MR
has granted investment management authority to the sub-adviser (see the
section entitled "Management Contracts"), and the 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 below. FMR is also
responsible for the placement of transaction orders for other investment
companies and accounts for which it or its affiliates act s as
investment adviser. Securities purchased and sold by the money market fund
generally will be traded on a net basis (i.e., without commission). 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; and the reasonableness of any commissions.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other 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 accounts; effect securities transactions, and perform
functions incidental thereto (such as clearance and settlement). FMR
maintains a listing of broker-dealers who provide such services on a
regular basis. However, as many transactions on behalf of the money market
fund are placed with broker-dealers (including broker-dealers on the list)
without regard to the furnishing of such services, it is not possible to
estimate the proportion of such transactions directed to such
broker-dealers solely because such services were provided. The selection of
such broker-dealers generally is made by FMR (to the extent possible
consistent with execution considerations) based upon the quality of
research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds 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 the funds. 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.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive 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
each 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 the funds and 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.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds, or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI), a subsidiary of FMR Corp., if the commissions are fair,
reasonable, and comparable to commissions charged by non-affiliated,
qualified brokerage firms for similar services.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
For the fiscal years ended January 31, 1 996 a nd 1995, the portfolio
turnover rates wer e 77% and 33% , respectivel y, for Spartan
New Y ork Intermediate an d 82% and 38%, respectively
fo r Spartan New York Income.
For fiscal 1996, 1995, and 1994 the funds paid no brokerage commissions.
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, investment decisions for each fund
are made independently from those of other funds managed by FMR or 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 accounts.
Simultaneous transactions are inevitable when several funds and 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
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 OF PORTFOLIO SECURITIES
SPARTAN NEW YORK INTERMEDIATE AND SPARTAN NEW YORK INCOME .
Valuations of portfolio securities furnished by the pricing service
employed by the funds are based upon a computerized matrix system or
appraisals by the pricing service, in each case in reliance upon
information concerning market transactions and quotations from recognized
municipal securities dealers. The methods used by the pricing service and
the quality of valuations so established are reviewed by officers of the
funds and FSC under the general supervision of the Board of Trustees. There
are a number of pricing services available, and the Trustees, or officers
acting on behalf of the Trustees, on the basis of on-going evaluation of
these services, may use other pricing services or discontinue the use of
any pricing service in whole or in part. Futures contracts and options are
valued in the basis of market quotations if available.
SPARTAN N EW YORK MONEY MARKET . The fund values its
investments on the basis of amortized cost. This technique involves valuing
an instrument at its cost as adjusted for amortization of premium or
accretion of discount rather than its value based on current market
quotations or appropriate substitutes which reflect current market
conditions. The amortized cost value of an instrument may be higher or
lower than the price the fund would receive if it sold the instrument.
Valuing the fund's instruments on the basis of amortized cost and use of
the term "money market fund" are permitted by Rule 2a-7 under the 1940 Act.
The fund must adhere to certain conditions under Rule 2a-7.
The Board of Trustees of the trust oversees FMR's adherence to SEC rules
concerning money market funds, and has established procedures designed to
stabilize the fund's NAV at $1.00. At such intervals as they deem
appropriate, the Trustees consider the extent to which NAV calculated by
using market valuations would deviate from $1.00 per share. If the Trustees
believe that a deviation from the 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.
During periods of declining interest rates, the fund's yield based on
amortized cost may be higher than the yield based on market valuations.
Under these circumstances, a shareholder in the fund would be able to
obtain a somewhat higher yield than would result if the fund utilized
market valuations to determine its NAV. The converse would apply in a
period of rising interest rates.
PERFORMANCE
The funds 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. A bond fund's share price, and each
fund's yield and total 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. To compute the money market fund's yield fo r 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.
The money market fund also may calculate a compound effective yield by
compounding the base period return over a one-year period. In addition to
the current yield, the money market fund may quote yields in advertising
based on any historical seven-day period. Yields for the money market fund
are calculated on the same basis as other money market funds, as required
by regulation.
For the bond funds, yields are computed by dividing a fund's interest
income for a given 30-day or one-month period, net of expenses, by the
average number of shares entitled to receive dividends during the period,
dividing this figure by the fund's net asset value per share (NAV) at the
end of the period, and annualizing the result (assuming compounding of
income) in order to arrive at an annual percentage rate. Yields do not
reflect Spartan New York Income 's .50% redemption fee, which
applies to shares held less than 180 days. Income is calculated for
purposes of the bond funds' 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 determining the bond funds' 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, a bond 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 a fund's performance and in
providing a basis for comparison with other investment alternatives.
However, each 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 the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
A fund's tax-equivalent yield is the rate an investor would have to earn
from a fully taxable investment before taxes to equal the fund's tax-free
yield. Tax-equivalent yields are calculated by dividing a fund's yield by
the result of one minus a stated federal or combined federal and state and
city 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 1996. 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 3% to 8%. Of course, no
assurance can be given that a fund will achieve any specific tax-exempt
yield. While the funds invest principally in obligations whose interest is
exempt from federal and state income tax, other income received by the
funds 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 19 96.
1996 TAX RATES

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Marginal Combined
Tax Rate New York

State and Combined New
Marginal Federal New York New York Federal York State, City
Taxable Income Income State and Effective and Federal

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Single Return* Joint Return* Tax Bracket State City Tax Bracket** Tax Bracket**

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
$24,001-$25,000 $40,101-$45,000 28% 7.13% 11.51% 33.13% 36.29%

$25,001-$58,150 $45,001-$96,900 28% 7.13% 11.53% 33.13% 36.30%

$58,151-$60,000 $96,901-$108,000 31% 7.13% 11.53% 35.92% 38.95%

$60,001-$121,300 $108,001-$147,700 31% 7.13% 11.58% 35.92% 38.99%

$121,301-$263,750 $147,701-$263,750 36% 7.13% 11.58% 40.56% 43.41%

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
$263,751+ above $263,751+ above 39.6% 7.13% 11.58% 43.90% 46.60%

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
36.29% 36.30% 3 8 . 95 % 3 8 . 99 % 43. 4 1% 46. 60 %

</TABLE>

<TABLE>
<CAPTION>
<S> <C>
To match these

tax-free yields: Your taxable investment would have to earn the following yield:

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
3% 4.71% 4.71% 4.91% 4.92% 5.30% 5.62%

4% 6.28% 6.28% 6.55% 6.56% 7.07% 7.49%

5% 7.85% 7.85% 8.19% 8.20% 8.84% 9.36%

6% 9.42% 9.42% 9.83% 9.83% 10.60% 11.24%

7% 10.99% 10.99% 11.47% 11.47% 12.37% 13.11%

8% 12.56% 12.56% 13.10% 13.11% 14.14% 14.98%

</TABLE>

NEW YORK STATE RESIDENTS (OUTSIDE NYC) - DOUBLE TAXES - 1996
If your effective combined federal and state personal income tax rate in
1996 is:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
33. 13 % 3 5 . 92 % 40. 5 6% 4 3 . 90 %

</TABLE>

To match these
tax-free yields: Your taxable investment would have to earn the following
yield:
3% 4.49% 4.68% 5.05% 5.35%

4% 5.98% 6.24% 6.73% 7.13%

5% 7.48% 7.80% 8.41% 8.91%

6% 8.97% 9.36% 10.09% 10.70%

7% 10.47% 10.92% 11.78% 12.48%

8% 11.96% 12.48% 13.46% 14.26%

Each 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 tables above,
the tax-equivalent yields are calculated assuming investments are 100%
federally and state tax-free.
TOTAL RETURN CALCULATIONS. Total 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 the fund's NAV over a
stated period. Average annual total 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 total return of 100% over ten years would produce an average
annual total 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 total 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
total returns represent averaged figures as opposed to the actual
year-to-year performance of the fund.
In addition to average annual total returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
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. Total 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 total return. Total returns may be quoted on a
before-tax or after-tax basis and may or may not include the effect of
Spartan New York Income 's .50% redemption fee on shares held
less than 180 days. Excluding Spartan New York Income 's
redemption fee from a total return calculation produces a higher total
return figure. Total returns, yields, and other performance information may
be quoted numerically or in a table, graph, or similar illustration, and
may omit or include the effect of the $5.00 account closeout fee.
NET ASSET VALUE. Charts and graphs using a fund's net asset values,
adjusted net asset values, and benchmark indices 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 FUND RESULTS. The following tables show the money market fund's
7-day yield, the bond funds' 30-day yields, and each fund's tax-equivalent
yields and total returns for periods ended January 31, 1 996 . Total
return figures include the effect of the $5.00 account closeout fee based
on an average size account, but not Spartan New York Income's .50%
redemption fee applicable to shares held less than 180 days.
The tax-equivalent yield is based on a combined effective federal and state
income tax rate of 43.41% an d reflects that, as of January 31,
19 96 , none of the 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.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thirty-/ Tax- One Five One Five Life of
Seven-Day Equivalent Year Years Life of Year Years Fund
Yield Yield Fund

Spartan New York Money
Market 2.92% 5.16 % 3.46% 2.94% 3.39 %* 3.46% 15.62% 22.12 % *

Spartan New York
Intermediate 4.55% 8.04% 12.98% n/a 4.97

% ** 12.98% n/a 10.69

% **

Spartan New York
Income 4.74% 8.38% 16.05% 9.06% 8.79

%* 16.05% 54.31% 65.73%*

</TABLE>

* From February 3, 1990 (commencement of operations)
** From December 29, 1993 (commencement of operations)
If FMR had not reimbursed certain fund expenses during these periods,
Spartan New York Intermediate's yield and tax-equivalent yield would
have been 4.25 % and 7.51 % respectively, and total returns
would have been lower.
The following table shows the income and capital elements of each fund's
cumulative total return. The table compares each fund's return to the
record of the Standard & Poor's Composite Index of 500 Stocks (S&P 500),
the Dow Jones Industrial Average (DJIA), and the cost of living (measured
by the Consumer Price Index, or CPI) over the same period. The CPI
information is as of the month end closest to the initial investment date
for each fund. The S&P 500 and DJIA comparisons are provided to show how
each fund's total return compared to the record of a broad average of
common stocks and a narrower set of stocks of major industrial companies,
respectively, over the same period. Of course, since each fund invests in
short-term or fixed-income securities, common stocks represent a different
type of investment from the fund. 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 a fixed-income investment such
as the funds. Figures for the S&P 500 and DJIA are based on the prices of
unmanaged groups of stocks and, unlike the funds' returns, do not include
the effect of paying brokerage commissions or other costs of investing.
During the period from February 3, 1990 (commencement of operations) to
Ja nuary 31, 1996, a hypothetical $10,000 investment Spartan
New York Money Market would have grown to $12,212, a ssuming all
distributions were reinvested. This was a period of fluctuating interest
rates and bond prices and the figures below should not be considered
representative of the dividend income or capital gain or loss that could be
realized from an investment in the fund today.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SPARTAN NEW YORK MONEY MARKET INDICES

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended Value of Value of Value of Total S&P 500 DJIA Cost of
Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions

1996 $ 10,000 $ 2 ,212 $ 0 $ 12,212 $ 23,008 $ 24,812 $ 12,135

1995 $ 10,000 $ 1,804 $ 0 $ 11,804 $ 16,592 $ 17,258 $ 11,797

1994 $ 10,000 $ 1,509 $ 0 $ 11,509 $ 16,505 $ 17,383 $ 11,476

1993 $ 10,000 $ 1,284 $ 0 $ 11,284 $ 14,623 $ 14,061 $ 11,193

1992 $ 10,000 $ 999 $ 0 $ 10,999 $ 13,221 $ 13,294 $ 10,840

1991* $ 10,000 $ 562 $ 0 $ 10,562 $ 10,774 $ 10,925 $ 10,565

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SPARTAN NEW YORK INTERMEDIATE INDICES

</TABLE>

1996 $ 9,980 $ 1,080 $ 10 $ 11,070 $ 14,279 $ 15,006 $ 10,604

1995 $ 9,280 $ 518 $ 0 $ 9,798 $ 10,297 $ 10,438 $ 10,309

1994 * $ 10,090 $ 33 $ 0 $ 10,123 $ 10,243 $ 10,513 $ 10,027

</TABLE>

* From December 29, 1993 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on
December 29, 1993, 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
$11,044. 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 $983 for dividends and
$9 fo r capital gains distributions. Tax consequences of different
investments have not been factored into the above figures. The figures in
the table do not reflect the effect of the fund's $5.00 account closeout
fee.
During the period from February 3, 1990 (commencement of operations) to
January 31, 1996 a hypothetical $10,000 investment in Spartan New York
Income would have grown to $16,574, assuming all distributions were
reinvested. This was a period of fluctuating interest rates and bond prices
and the figures below should not be considered representative of the
dividend income or capital gain or loss that could be realized from an
investment in the fund today.
SPARTAN NEW YORK INCOME INDICES

1996 $ 10,760 $ 4,887 $ 927 $ 16,574 $ 23,008 $ 24,812 $ 12,135

1995 $ 9,780 $ 3,668 $ 834 $ 14,282 $ 16,592 $ 17,258 $ 11,797

1994 $ 11,380 $ 3,309 $ 530 $ 15,220 $ 16,505 $ 17,383 $ 11,476

1993 $ 10,890 $ 2,406 $ 159 $ 13,454 $ 14,623 $ 14,061 $ 11,193

1992 $ 10,460 $ 1,552 $ 23 $ 12,035 $ 13,221 $ 13,294 $ 10,840

1991* $ 9,990 $ 751 $ 0 $ 10,741 $ 10,774 $ 10,925 $ 10,565

</TABLE>

* From February 3, 1990 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on
February 3, 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
$15,651. 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 $3,834 for dividends
and $696 for capital gains distributions. Tax consequences of different
investments have not been factored into the above figures. The figures in
the table do not reflect the effect of the fund's $5.00 account closeout
fee or the fund's .50% redemption fee applicable to shares held less than
180 days.
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 Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. Lipper may also rank funds 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 indices
prepared by Lipper or other organizations. The bond funds may be
compared to the Lehman Brothers Municipal Bond Index, a total return
performance benchmark for the long-term, investment-grade tax-exempt bond
market. Issues included in the index have a minimum credit rating of Baa
and a maturity of at least one year. Subsequent to December 31, 1995, zero
coupon bonds and issues subject to the alternative minimum tax are included
in the index. Spartan New York Intermediate Municipal Income and Spartan
New York Municipal Income may also be compared to the Lehman Brothers New
York 1-17 Year Municipal Bond Index and the Lehman Brothers New York 4 Plus
Year Municipal Bond Index, respectively. The Lehman Brothers New York 1-17
Year Municipal Bond Index includes New York investment-grade municipal
bonds in the Lehman Brothers Municipal Bond Index with maturities between
one and 17 years. The Lehman Brothers New York 4 Plus Year Municipal Bond
Index includes New York investment-grade municipal bonds in the Lehman
Brothers Municipal Bond Index with maturities of four years or greater.
When comparing these indices, 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, the 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 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 , CPI, and combinations of various
capital markets. The performance of these capital markets is based on the
returns of different indices.
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 total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND AVERAGES(trademark)/New York
Tax-Free Funds' category, which is reported in the MONEY FUND
REPORT(registered trademark), covers over 392 New York tax-free money
market funds. The Bond Fund Report AverageS(trademark)/All Tax-Free, which
is reported in the BOND FUND REPORT(registered trademark), covers over 565
tax-free bond funds. Whe n evaluating comparisons to money market funds,
investors should consider the relevant differences in investment objectives
and policies. Specifically, money market funds invest in short-term,
high-quality instruments and seek to maintain a stable $1.00 share price.
Bond funds, however, invests in longer-term instruments and its share price
changes daily in response to a variety of factors.
A fund may compare and contrast in advertising the relative advantages of
investing in a mutual fund versus an individual municipal bond. Unlike
tax-free 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 initial investment requirements and sales charges of many
tax-free mutual funds are lower than the purchase cost of individual
municipal bonds, which are generally issued in $5,000 denominations and are
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; charitable giving; and the Fidelity credit
card. 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,
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 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 total 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 fund
may also discuss or illustrate examples of interest rate sensitivity.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
A 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, 1996, FMR advised over $26.5 billion in tax-free fund
assets, $81 billion in money market fund assets, $251 billion in equity
fund assets, $54 billion in international fund asset s, and $23
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, each 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 AND REDEMPTION INFORMATION
Each fund is open for business and its net asset value per share (NAV)
is calculated each day the New York Stock Exchange (NYSE) is open for
trading. The NYSE has designated the following holiday closings for 1996:
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day, and Christmas Day. Although FMR expects
the same holiday schedule to be observed in the future, the NYSE may modify
its holiday schedule at any time. In addition, the funds will not process
wire purchases and redemptions on days when the Federal Reserve Wire System
is closed.
FSC normally determines each fund's NAV as of the close 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). To the extent that portfolio securities are
traded in other markets on days when the NYSE is closed, a fund's NAV may
be affected on days when investors do not have access to the fund to
purchase or redeem shares. In addition, trading in some of a fund's
portfolio securities may not occur on days when the fund is open for
business.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving 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.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940
Act), each fund is required to give shareholders at least 60 days' notice
prior to terminating or modifying its exchange privilege. Under the Rule,
the 60-day notification requirement may be waived if (i) the only effect of
a modification would be to reduce or eliminate an administrative fee,
redemption fee, or deferred sales charge ordinarily payable at the time of
an exchange, or (ii) the fund suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
In the Prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. To the extent that each fund's income is designated as federally
tax-exempt interest, the daily dividends declared by the fund are also
federally tax-exempt. Short-term capital gains are distributed as dividend
income, but do not qualify for the dividends-received deduction. These
gains will be taxed as ordinary income. Each fund will send each
shareholder a notice in January describing the tax status of dividend and
capital gain distributions (if any) for the prior year.
Shareholders are required to report tax-exempt income on their federal tax
returns. Shareholders who earn other income, such as Social Security
benefits, may be subject to federal income tax on up to 85% of such
benefits to the extent that their income, including tax-exempt income,
exceeds certain base amounts.
Each fund purchases municipal securities that are free from federal
income tax based on opinions of counsel regarding their tax status. These
opinions generally will be based on covenants by the issuers or other
parties regarding continuing compliance with federal tax requirements. If
at any time the covenants are not complied with, distribution to
shareholders of interest on a security could become federally taxable
retroactive to the date the security was issued. For certain types of
structure securities, opinions of counsel may also be based on the effect
of the structure on the federal and state tax treatment of the income.
As a result of the Tax Reform Act of 1986, 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 will be
considered tax-exempt for purposes of Spartan New York Money
Market 's, and Spartan New York Income's policies of
investing so that at least 80% of their income is free from federal income
tax and Spartan New York Intermediate's policy of investing so that at
least 80% of its assets are in municipal securities whose interest is free
from federal income tax. 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. Private
activity securities issued after August 7, 1986 to benefit a private or
industrial user or to finance a private facility are affected by this rule.
A portion of the gain on bonds purchased with market discount after
April 30, 1993 and short-term capital gains distributed by each fund are
taxable to shareholders as dividends, not as capital gains. Dividend
distributions resulting from a recharacterization of gain from the sale of
bonds purchased with market discount after April 30, 1993 are not
considered income for pur poses of Spartan New York Money Market's
and Spartan New York Income's policy of investing so that at least 80%
of its income is free from federal income tax or assets are invested in
municipal securities whose interest is free from T he money market fund
may distribute any net realized short-term capital gains and taxable market
discount once a year or more often, as necessary, to maintain its net asset
value at $1.00 per share.
NEW YORK TAX MATTERS. It is not expected that a fund will incur New
York income or franchise tax liability. New York personal income tax law
provides that exempt-interest dividends paid by a regulated investment
company, or series thereof, from interest on obligations which are exempt
from tax under New York law are excludable from gross income.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by each fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of a fund, and such shares are held six
months or less and are sold at a loss, the portion of the loss equal to the
amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes. Short-term capital gains distributed by
each fund are taxable to shareholders as dividends, not as capital gains.
The money market fund does not anticipate distributing long-term capital
gains.
As of January 31, 1996 , the Spartan New York Money Market had
a capital loss carryforward aggregating approximately $71,730. This
loss carryforward, of which $20, $20,930 and $50,780 w ill expire on
January 31, 2000, 2001, and 2002, respectively, is available to
offset future capital gains.
As of January 31 , 1996 Spartan New York Intermediate had a capital loss
carryforward aggregating approximately $319,000 which will expire on
January 31, 2003. This amount is available to offset any future capital
gains.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes 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. Each fund intends to comply with other tax rules
applicable to regulated investment companies, including a requirement that
capital gains from the sale of securities held less than three months
constitute less than 30% of the fund's gross income for each fiscal year.
Gains from some futures contracts and options are included in this 30%
calculation, which may limit a fund's investments in such instruments.
Spartan New York Money Mark e t is treated as a separate entity
from the other funds o f Fidelity New York Municipal Trust II and
Spartan New York Intermediate and Spartan New York Income are
treated as separate entities from the other funds of Fidelity New York
Municipal Trust for tax purposes.
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. 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.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. 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 Investment Company Act of 1940 (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 three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
Fidelity Investments Institutional Operations Company, which performs
shareholder servicing functions for institutional customers and funds sold
through intermediaries; and 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
account 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.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below.
Except as indicated, each individual has held the office shown or other
offices in the same company for the last five years. Trustees and officers
elected or appointed t o Fidelity New York Municipal Trust II p rior
to the money market fund's conversion from a series of a Massachusetts
business trust served in identical capacities. All persons named as
Trustees also serve in similar capacities for other funds advised by FMR.
The business address of each Trustee and officer who is an "interested
person" (as defined in the Investment Company Act of 1940) 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 (65), 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
FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
J. GARY BURKHEAD (53), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (63), Trustee (1991), is a consultant to Western Mining
Corporation (1994). Prior to February 1994, he was President of Greenhill
Petroleum Corporation (petroleum exploration and production, 1990). Until
March 1990, Mr. Cox was President and Chief Operating Officer of Union
Pacific Resources Company (exploration and production). He is a Director of
Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University and
the University of Texas at Austin.
PHYLLIS BURKE DAVIS (64), Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton Corporation (manufacturing, 1991),
and the TJX Companies, Inc. (retail stores, 1990), and previously served as
a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In
addition, she is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
RICHARD J. FLYNN (72), Trustee, is a financial consultant. Prior to
September 1986, Mr. Flynn was Vice Chairman and a Director of the Norton
Company (manufacturer of industrial devices). He is currently a Trustee of
College of the Holy Cross and Old Sturbridge Village, Inc., and he
previously served as a Director of Mechanics Bank (1971-1995).
E. BRADLEY JONES (68), Trustee (1990). Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is
a Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc. (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990),
and he previously served as a Director of NACCO Industries, Inc. (mining
and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc.
(1985-1995). In addition, he serves as a Trustee of First Union Real Estate
Investments, a Trustee and member of the Executive Committee of the
Cleveland Clinic Foundation, a Trustee and member of the Executive
Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
DONALD J. KIRK (63), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business and a financial consultant.
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 is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Chairman of the Board of Directors of the National
Arts Stabilization Fund, Vice Chairman of the Board of Trustees of the
Greenwich Hospital Association, and as a Member of the Public Oversight
Board of the American Institute of Certified Public Accountants' SEC
Practice Section (1995).
PETER S. LYNCH (53), Trustee (1990) is Vice Chairman and Director of FMR
(1992). 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). He is a Director of W.R. Grace
& Co. (chemicals) and Morrison Knudsen Corporation (engineering and
construction). 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 (1990).
GERALD C. McDONOUGH (66), Trustee, is Chairman of G.M. Management Group
(strategic advisory services). Prior to his retirement in July 1988, he was
Chairman and Chief Executive Officer of Leaseway Transportation Corp.
(physical distribution services). Mr. McDonough is a Director of
ACME-Cleveland Corp. (metal working, telecommunications and electronic
products), Brush-Wellman Inc. (metal refining), York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp. (water
treatment equipment, 1992), and Associated Estates Realty Corporation (a
real estate investment trust, 1993).
EDWARD H. MALONE (71), Trustee. Prior to his retirement in 1985, Mr. Malone
was Chairman, General Electric Investment Corporation and a Vice President
of General Electric Company. He is a Director of Allegheny Power Systems,
Inc. (electric utility), General Re Corporation (reinsurance) and Mattel
Inc. (toy manufacturer). In addition, he serves as a Trustee of Corporate
Property Investors, the EPS Foundation at Trinity College, the Naples
Philharmonic Center for the Arts, and Rensselaer Polytechnic Institute, and
he is a member of the Advisory Boards of Butler Capital Corporation Funds
and Warburg, Pincus Partnership Funds.
MARVIN L. MANN (62), Trustee (1993) is Chairman of the Board, President,
and Chief Executive Officer of Lexmark International, Inc. (office
machines, 1991). 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) and Infomart (marketing
services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign
Vice Chairman of the Tri-State United Way (1993) and is a member of the
University of Alabama President's Cabinet (1990).
THOMAS R. WILLIAMS (67), 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 BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
FRED L. HENNING, JR. (56), Vice President, is Vice President of Fidelity's
money market (1994) and fixed-income (1995) funds and Senior Vice President
of FMR Texas Inc.
JANICE BRADBURN (44), is Vice President of Spartan New York Money Market
(1993) and other funds managed by FMR.
NORMAN LIND (39), is Vice President of Spartan New York Income (1995) and
other funds managed by FMR.
ARTHUR S. LORING (48), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (48), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995).
THOMAS D. MAHER (50), Assistant Vice President (1990), is Assistant Vice
President of Fidelity's money market funds and Vice President and Associate
General Counsel of FMR Texas Inc. (1990). Prior to 1990, Mr. Maher was an
employee of FMR.
JOHN H. COSTELLO (49), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (50), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994); Chief Financial
Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice
President, Assistant Controller, and Director of the Accounting Department
- - First Boston Corp. (1986-1990).
The following table sets forth information describing the compensation of
each current trustee of each fund for his or her services as trustee for
the fiscal year ended January 31, 1996.
COMPENSATION TABLE
Aggregate Compensation

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J. Gary Ralph Phyllis Richard Edward C. E. Donald Peter S. Gerald C. Edward Marvin Thomas
Burkhead** F. Cox Burke J. Flynn Johnson Bradley J. Kirk Lynch** McDonough H. L. Mann R.
Davis 3d** Jones Malone Williams

Spartan $ 0 $ 246 $ 243 $ 307 $ 0 $ 246 $ 249 $ 0 $ 243 $ 246 $ 246 $ 240
New York
Money Market

Spartan 0 18 18 22 0 18 18 0 17 18 18 17
New York
Intermediate

Spartan 0 127 126 159 0 127 129 0 126 127 127 124
New York
Income

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees Pension or Estimated Annual Total
Retirement Benefits Compensation
Benefits Accrued Upon Retirement from the Fund
as Part of Fund from the Complex*
Expenses from the Fund Complex*
Fund Complex*

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

Ralph F. Cox 5,200 52,000 128,000

Phyllis Burke Davis 5,200 52,000 125,000

Richard J. Flynn 0 52,000 160,500

Edward C. Johnson 3d** 0 0 0

E. Bradley Jones 5,200 49,400 128,000

Donald J. Kirk 5,200 52,000 129,500

Peter S. Lynch** 0 0 0

Gerald C. McDonough 5,200 52,000 128,000

Edward H. Malone 5,200 44,200 128,000

Marvin L. Mann 5,200 52,000 128,000

Thomas R. Williams 5,200 52,000 125,000

</TABLE>

* Information is as of December 31, 1995 for 219 funds in the
complex.
** Interested trustees of the fund are compensated by FMR.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of Trustees' 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 the fund to retain the services of
any Trustee or to pay any particular level of compensation to the Trustee.
Each fund may invest in such designated securities under the Plan without
shareholder approval.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments is not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former
non-interested Trustees, receive retirement benefits under the program.
On January 31,1 996 the Trustees and officers of each fund owned, in the
aggregate, less than 1% of each fund's total outstanding shares.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under 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 each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund and all Trustees who are "interested
persons" of the trusts 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 and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
FMR is responsible for the payment of all expenses of each fund with
certain exceptions. Specific expenses payable by FMR include, without
limitation, expenses for the typesetting, printing, and mailing proxy
materials to shareholders; legal expenses, and the fees of the custodian,
auditor and non-interested Trustees; costs of typesetting, printing, and
mailing prospectuses and statements of additional information, notices and
reports to shareholders; each fund's proportionate share of insurance
premiums and Investment Company Institute dues. FMR also provides for
transfer agent and dividend disbursing services and portfolio and general
accounting record maintenance through FSC.
FMR pays all other expenses of each fund with the following exceptions:
fees and expenses of all Trustees of the trust who are not "interested
persons" of the trust or FMR (the non-interested Trustees); interest on
borrowings; taxes; brokerage commissions (if any); and such nonrecurring
expenses as may arise, including costs of any litigation to which a fund
may be a party, and any obligation it may have to indemnify the officers
and Trustees with respect to litigation.
FMR is the money market fund's manager pursuant to a management contract
dated March 22, 1994. The contract was approved by Fidelity New York
Municipal Trust II as sole shareholder of the fund on March 22, 1994, in
conjunction with an Agreement and Plan of Conversion to convert the fund
from a series of a Massachusetts business trust to a series of a Delaware
trust. The Agreement and Plan of Conversion was approved by public
shareholders of the fund on January 19, 1994. Besides reflecting the fund's
redomiciling, the March 22, 1994 contract is identical to the fund's prior
management contract dated January 18, 1990 with FMR, which was approved by
shareholders on September 19, 1990. FMR is Spartan New York Income's
manager pursuant to a management contract dated January 18, 1990, which was
approved by shareholders on September 19, 1990. FMR is Spartan New York
Intermediate's manager pursuant to a management contract dated December 16,
1993, which was approved by FMR, then the sole shareholder, on December 16,
1993. The management fee paid to FMR is reduced by an amount equal to the
fees and expenses paid by each fund to the non-interested Trustees.
For the services of FMR under each contract, each fund pays FMR a monthly
management fee at the annual rate of .50% (Spartan New York Money Market)
and .55% (Spartan New York Intermediate and Spartan New York Income) of
average net assets throughout the month. Fees received by FMR, after
reduction of fees and expenses paid by the fund to the non-interested
Trustees, for the last three fiscal years are shown in the table below.

<TABLE>
<CAPTION>
<S> <C> <C>
Fiscal Year Management Fees Paid to FMR

Spartan New York Money Market 1996 $ 3,022,845

1995 $ 2,642,028

1994 $ 2,229,920

Spartan New York Intermediate 1996 $ 270,958

1995 $ 156,686

1994* $ 2,191

Spartan New York Municipal 1996 $ 1,745,026

1995 $ 1,934,314

1994 $ 2,349,334

</TABLE>

*From December 29, 1993 (commencement of operations)
FMR may, from time to time, voluntarily reimburse all or a portion of each
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). 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 each fund's total returns and yield and repayment of
the reimbursement by each fund will lower its total returns and yield.
During the fiscal periods reported, FMR voluntarily agreed to reimburse
certain funds to the extent that the fund's aggregate operating expenses
were in excess of an annual rate of its average net assets. The tables
below identify the funds in reimbursement; the levels of and periods for
such reimbursement; the amount of management fees incurred under each
contract before reimbursement; and the dollar amount reimbursed by FMR, if
any, for each period.
SPARTAN NEW YORK MONEY MARKET:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Years Ended Management Fees Before Amount of Amount of
January 31 Reimbursement Expense Limitation Credits Reducing the
and Credits Reimbursement Management Fees

</TABLE>

1996 $ 3,022,845 $ 0 $ 23,177

1995 $ 2,642,028 $ 0 $ 0

1994 $ 2,229,920 $ 0 $ 0

SPARTAN N EW YORK INTERMEDIAT E:
From To Expense

Limitation

February 1, 1996 .40%

October 1, 1995 January 31, 1996 .25%

October 1, 1994 September 30, 1995 .10%

December 29, 1993 September 30, 1994 .00%

</TABLE>

1996 $ 270,958 $ 163,828 $ 0

1995 $ 156,686 $ 145,536 $ 0

1994* $ 2,191 $ 2,191 $ 0

* From commencement of operations (December 29, 1993)
SPARTAN N EW YORK INCOME :
From To Expense

Limitation

September 1, 1992 February 28, 1993 .50%

</TABLE>

1996 $ 1,745,026 $ 0 $ 29,211

1995 $ 1,934,314 $ 0 $ 0

1994* $ 2,349,334 $ 14,626 $ 0

To comply with the California Code of Regulations, FMR will reimburse
the fund if and to the extent that a fund's aggregate operating expenses
exceed specified percentages of its average net assets. The applicable
percentages are 2% of the first $30 million, 2% of the next $70 million,
and 1% of the average net assets in excess of $100 million. When
calculating the fund's expenses for purposes of this regulation, the fund
may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its distribution plan expenses.
To defray shareholder service costs, FMR or its affiliates also collect
each fund's $5.00 exchange fee, $5.00 account close out fee, and $5.00 fee
for wire purchases and redemptions, and Spartan New York Money Market's
and Spartan New York Intermediate's $2.00 checkwriting charge.
Shareholder transaction fees and charges collected by FMR are indicated in
the table below.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Period Ended Account Checkwriting
January 31 Exchange Fees Closeout Fees Wire Fees Fees

Spartan New York Money Market 1996 $ 3,935 $ 996 $ 1,180 $ 5,645

1995 4,710 1,261 1,120 6,069

1994 9,555 1,473 1,575 6,709

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Period Ended Account Checkwriting
January 31 Exchange Fees Closeout Fees Wire Fees Fees

Spartan New York Intermediate 1996 $ 460 $ 170 $ 85 $ 190

1995 1,030 160 130 74

1994* 15 0 5 0

Period Ended Account
January 31 Exchange Fees Closeout Fees Wire Fees

Spartan New York Income $ 1996 $ 2,510 $ 930 $ 340

1995 7,070 2,230 865

1994 6,745 1,090 990

</TABLE>

* From December 29, 1993 (commencement of operations)
SUB-ADVISER. On behalf of the money market fund, FMR has entered
into a sub-advisory agreement with FTX pursuant to which FTX has primary
responsibility for providing portfolio investment management services to
the fund .
Under the sub-advisory agreement, dated March 22, 1994, which was approved
by shareholders on January 19, 1994, FMR pays FTX fees equal to 50% of the
management fee payable to FMR under its management contract with each fund.
The fees paid to FTX are not reduced by any voluntary or mandatory expense
reimbursements that may be in effect from time to time. On behalf of the
fund, for fiscal 1996, 1995, and 1994, FMR paid FTX fees of $1,511,423,
$1,321,014 and $1,114,960, respecti vely.
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved Distribution and Service Plans on behalf of the
funds (the Plans) pursuant to Rule 12b-1 under the Investment Company Act
of 1940 (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 a 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 funds to FMR is
deemed to be indirect financing by the funds of the distribution of their
shares, such payment is authorized by the Plans. Each Plan also
specifically recognizes that FMR, either directly or through FDC, may use
its management fee revenue, past profits, or other resources, without
limitation, to pay promotional and administrative expenses in connection
with the offer and sale of shares of each fund. In addition, each Plan
provides that FMR may use its resources, including its management fee
revenues, to make payments to third parties that assist in selling shares
of each fund, or to third parties, including banks, that render shareholder
support services.
No payments were made by FMR to third parties during the fiscal year
ended January 31, 1996.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
the fund and its shareholders. In particular, the Trustees noted that the
Plans do not authorize payments by a 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 shares of each fund, additional sales of fund shares may result.
Furthermore, certain shareholder support services may be provided more
effectively under the Plans by local entities with whom shareholders have
other relationships.
Spartan New York Money Market's Plan was approved by shareholders, in
connection with a reorganization transaction on March 22, 1994, pursuant to
an Agreement and Plan of Conversion. Spartan New York Intermediate's Plan
was approved by FMR as the then sole shareholder of the fund on December
16, 1993. Spartan New York Income's Plan was approved by FMR, the then sole
shareholder of the fund on September 19, 1990.
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 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.
CONTRACTS WITH FMR AFFILIATES
UMB is each fund's custodian and transfer agent. UMB has entered
into sub-contracts with FSC, an affiliate of FMR, under the terms of which
FSC performs the processing activities associated with providing transfer
agent and shareholder servicing functions for each fund. Under this
arrangement, FSC receives annual account fees and asset-based fees for each
retail account and certain institutional accounts based on account size. In
addition, these the fees are subject to increase based on postal
rate changes. With respect to certain institutional retirement accounts,
FSC receives asset-based fees only. With respect to certain other
institutional retirement accounts, FSC receives annual account fees and
asset based fees based on fund type. FSC also collects small account fees
from certain accounts with balances of less than $2,500. UMB has additional
sub-contracts with FSC, pursuant to which FSC performs the calculations
necessary to determine each fund's net asset value per share and dividends
and maintains each fund's accounting records. Under this arrangement, FSC
receives a fee based on each fund's average net assets. UMB is entitled to
reimbursement from FMR for fees paid to FSC since FMR must bear these costs
pursuant to its management contract with each fund.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreement calls
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered at net asset value. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
DESCRIPTION OF THE TRUSTS
TRUSTS' ORGANIZATION. Spartan New York Intermediate Municipal Income
Fund (formerly known as Spartan New York Intermediate Municipal Portfolio)
and Spartan New York Municipal Income Fund (formerly known as Spartan New
York Municipal High Yield Portfolio) are funds (series) of Fidelity New
York Municipal Trust (the Massachusetts trust) an open-end, management
investment company organized as a Massachusetts business trust on April 25,
1983. On January 8, 1990, the trust's name was changed from Fidelity New
York Tax-Free Fund to Fidelity New York Municipal Trust . Currently,
there are four funds of the Massachusetts trust: Fidelity New York
Municipal Income Fund; Fidelity New York Insured Municipal Income Fund;
Spartan New York Intermediate Municipal Income Fund; and Spartan New York
Municipal Income Fund. The Massachusetts trust's Declaration of Trust
permits the Trustees to create additional funds.
Spartan New York Municipal Money Market Fund (formerly known as Spartan
New York Municipal Money Market Portfolio) is a fund (series) of Fidelity
New York Municipal Trust II (the Delaware Trust) an open-end management
investment company organized as a Delaware business trust on June 20, 1991.
Currently, there are two funds of the Delaware Trust: Fidelity New York
Municipal Money Market Fund and Spartan New York Municipal Money Market
Fund. Fidelity New York Municipal Money Market Fund entered into an
agreement to acquire all of the assets of Fidelity New York Tax-Free Money
Market Fund, a series of Fidelity New York Municipal Trust (a Massachusetts
business trust) on December 30, 1991. Spartan New York Municipal Money
Market Fund entered into an agreement to acquire all of the assets of
Spartan New York Municipal Money Market Fund, a series of Fidelity New York
Municipal Trust (a Massachusetts business trust) an March 22, 1994. The
Delaware trust's Trust Instrument permits the Trustees to create additional
funds.
In the event that FMR ceases to be investment adviser to a trust or any of
its funds, the right of the trust or the fund to use the identifying names
"Fidelity" and "Spartan" may be withdrawn. There is a remote possibility
that one fund might become liable for an y misstatement in its
prospectus or statement of additional information about another fund.
The assets of each trust received for the issue or sale of shares of each
of its funds and all income, earnings, profits, and proceeds thereof,
subject only to the rights of creditors, are especially allocated to such
fund, and constitute the underlying assets of such fund. The underlying
assets of each fund are segregated on the books of account, and are to be
charged with the liabilities with respect to such fund and with a share of
the general expenses of their respective trusts. Expenses with respect to
the trusts are to be allocated in proportion to the asset value of their
respective funds, except where allocations of direct expense can otherwise
be fairly made. The officers of the trusts, subject to the general
supervision of the Boards of Trustees, have the power to determine which
expenses are allocable to a given fund, or which are general or allocable
to all of the funds of a certain trust. In the event of the dissolution or
liquidation of a trust, shareholders of each fund of that trust are
entitled to receive as a class the underlying assets of such fund available
for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY - MASSACHUSETTS TRUST. The
Massachusetts trust is an entity of the type commonly known as
"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. The Declaration of Trust provides that
the Massachusetts 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
Massachusetts trust or its Trustees shall include a provision limiting the
obligations created thereby to the Massachusetts trust and its assets. The
Declaration of Trust provides for indemnification out of each fund's
property of any shareholders held personally liable for the obligations of
the fund. 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 the 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.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
SHAREHOLDER AND TRUSTEE LIABILITY - DELAWARE TRUST. The Delaware
trust is a business trust organized under Delaware law. Delaware law
provides that shareholders shall be entitled to the same limitations of
personal liability extended to stockholders of private corporations for
profit. The courts of some states, however, may decline to apply Delaware
law on this point. The Trust Instrument contains an express disclaimer of
shareholder liability for the debts, liabilities, obligations, and expenses
of the Delaware trust and requires that a disclaimer be given in each
contract entered into or executed by the Delaware trust or its Trustees.
The Trust Instrument provides for indemnification out of each fund's
property of any shareholder or former shareholder held personally liable
for the obligations of the fund. The Trust Instrument 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
Delaware law does not apply, no contractual limitation of liability was in
effect, and the fund is unable to meet its obligations. FMR believes that,
in view of the above, the risk of personal liability to shareholders is
extremely remote.
The Trust Instrument further provides that the Trustees shall not be
personally liable to any person other than the Delaware trust or its
shareholders; moreover, the Trustees shall not be liable for any conduct
whatsoever, provided that Trustees are not protected against any liability
to which they would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties involved
in the conduct of their office.
VOTING RIGHTS - BOTH TRUSTS. Each fund's capital consists of shares
of beneficial interest. As a shareholder of Spartan New York
Intermediate and Spartan New York Income, you receive one vote for each
dollar value of net asset value you own. The shares have no preemptive or
conversion rights; voting and dividend rights, the right of redemption, and
the privilege of exchange are described in the Prospectus. Shares are fully
paid and nonassessable, except as set forth under the respective
"Shareholder and Trustee Liability" headings above. Shareholders
representing 10% or more of a trust or one of its funds may, as set forth
in the Declaration of Trust or Trust Instrument, call meetings of the trust
or fund for any purpose related to the trust or fund, as the case may be,
including, in the case of a meeting of an entire trust, the purpose on
voting on removal of one or more Trustees.
A trust or any fund may be terminated upon the sale of its assets to (or,
in the case of the Delaware trust and its funds, merger with) another
open-end management investment company or series thereof, or upon
liquidation and distribution of its assets. Generally such terminations
must be approved by vote of the holders of a majority of the outstanding
shares of the trust or fund (for the Delaware Trust), or by a vote of the
holders of a majority of the trust or the fund, as determined as determined
by the current value of each shareholder's investment in the fund or
trust (for the Massachusetts trust). However, the Trustees of the
Delaware trust may, without prior shareholder approval, change the form of
the organization of the Delaware trust by merger, consolidation, or
incorporation. If not so terminated or reorganized, the trusts and their
funds will continue indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder vote,
cause the Delaware trust to merge or consolidate into one or more trusts,
partnerships, or corporations, so long as the surviving entity is an
open-end management investment company that will succeed to or assume the
Delaware trust registration statement, or cause the Delaware trust to be
incorporated under Delaware law. Each fund may also invest all of its
assets in another investment company.
CUSTODIAN UMB Bank n.a., 1010 Grand Avenue, Kansas City, Missouri, is
custodian of the assets of the fund. The custodian is responsible for the
safekeeping of a fund's assets and the appointment of the subcustodian
banks and clearing agencies. The custodian takes no part in determining the
investment policies of a fund or in deciding which securities are purchased
or sold by a fund. However, a fund may invest in obligations of the
custodian and may purchase securities from or sell securities to the
custodian. The Bank of New York and Chemical Bank, each headquartered in
New York, also may serve as a special purpose custodian of certain assets
in connection with pooled repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and 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. Price Waterhouse LLP, 160 Federal Street, Boston, Massachusetts
serves as the trust's independent accountant. 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, 1996 are included in the fund's Annual Report, which
is a separate report supplied with this Statement of Additional
Information. Each fund's financial statements and financial highlights are
incorporated herein by reference.
APPENDIX
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value of
each investment by the number of days 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.
The descriptions that follow are examples of eligible ratings for the
funds. A fund may, however, consider the ratings for other types of
investments and the ratings assigned by other rating organizations when
determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S RATINGS OF STATE AND
MUNICIPAL NOTES:
Moody's ratings for state and municipal and other short-term obligations
will be designated Moody's Investment Grade (MIG, or VMIG for variable rate
obligations). This distinction is in recognition of the difference between
short-term credit risk and long-term credit risk. Factors affecting the
liquidity of the borrower and short-term cyclical elements are critical in
short-term ratings, while other factors of major importance in bond risk,
long-term secular trends for example, may be less important in the short
run. Symbols used will be as follows:
MIG-1/VMIG-1 - This designation denotes best quality. There is
present strong protection by established cash flows, superior liquidity
support, or demonstrated broad-based access to the market for refinancing.
MIG-2/VMIG-2 - This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding group.
MIG-3/VMIG-3 - This designation denotes favorable quality. All
security elements are accounted for, but there is lacking the undeniable
strength of the preceding grades. Liquidity and cash flow protection may be
narrow and market access for refinancing is likely to be less well
established.
MIG-4/VMIG-4 - This designation denotes adequate quality. Protection
commonly regarded as required of an investment security is present and,
although not distinctly or predominantly speculative, there is specific
risk.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF STATE AND MUNICIPAL NOTES:
SP-1 - Strong capacity to pay principal and interest. An issue
determined to possess a very strong capacity to pay debt service is given a
plus (+) designation.
SP-2 - Satisfactory capacity to pay principal and interest, with
some vulnerability to adverse financial and economic changes over the term
of the notes.
SP-3 - Speculative capacity to pay principal and interest.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S MUNICIPAL BOND RATINGS:
AAA - Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edged." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure. While
the various protective elements are likely to change, such changes as can
be visualized are most unlikely to impair the fundamentally strong position
of such issues.
AA - Bonds which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than the Aaa securities.
A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade obligations.
Factors giving security to principal and interest are considered adequate
but elements may be present which suggest a susceptibility to impairment
sometime in the future.
BAA - Bonds which are rated Baa are considered as medium-grade
obligations, (i.e., they are neither highly protected nor poorly secured).
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
BA - Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.
CAA - Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with respect
to principal or interest.
There are nine basic rating categories for long-term obligations. They
range from AAA (highest quality) to C (lowest quality). Those bonds within
the AA, A, BAA, BA and B categories that Moody's believes possess the
strongest credit attributes within those categories are designated by the
symbols AA1, A1, BAA1, BA1 and B1.
DESCRIPTION OF STANDARD & POOR'S MUNICIPAL BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal
is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the higher-rated issues only in small
degree.
A - Debt rated A has a strong capacity to pay interest and repay
principal, although it is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than debt in higher
rated categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to
pay interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
BB - Debt rate BB has less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
The BB rating category is also used for debt subordinated to senior debt
that is assigned an actual or implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but
currently has the capacity to meet interest payments and principal
repayments. Adverse business, financial, or economic conditions will likely
impair capacity or willingness to pay interest and repay principal. The B
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to
default, and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal.
In the event of adverse business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and repay principal. The
CCC rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied B or B- rating.
The ratings from AA to CCC may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a)(1) Financial Statements and Financial Highlights, included in the
Annual Report, for Spartan New York Municipal Money Market Portfolio
(currently known as Spartan New York Municipal Money Market Fund), Spartan
New York Intermediate Municipal Portfolio (currently known as Spartan New
York Intermediate Municipal Income Fund), and Spartan New York Municipal
High Yield Portfolio (currently known as Spartan New York Municipal Income
Fund), for the fiscal year ended January 31, 1996, are incorporated herein
by reference to the funds' Statement of Additional Information and were
filed on March 11, 1996 for Fidelity New York Municipal Trust (No. 2-83295)
and Fidelity New York Municipal Trust II (No. 33-42943) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(2) Financial Statements and Financial Highlights, included in the
Annual Report, for Fidelity New York Tax-Free Money Market Portfolio
(currently known as Fidelity New York Municipal Money Market Fund),
Fidelity New York Tax-Free Insured Portfolio (currently known as Fidelity
New York Insured Municipal Income Fund) and Fidelity New York Tax-Free High
Yield Portfolio (currently known as Fidelity New York Municipal Income
Fund) for the fiscal year ended January 31, 1996, are incorporated herein
by reference to the funds' Statement of Additional Information and were
filed on March 11, 1996 for Fidelity New York Municipal Trust (No. 2-83295)
and Fidelity New York Municipal Trust II (No. 33-42943) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated herein
by reference.
(b) Exhibits
(1) Amended and Restated Declaration of Trust, dated March 17, 1994, is
incorporated herein by reference to Exhibit 1 to Post-Effective Amendment
No. 33.
(2) By-Laws of the Trust, as amended, are incorporated herein by
reference to Exhibit 2(a) to Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(3) Not applicable.
(4) Not applicable.
(5) (a) Management Contract between Spartan New York Intermediate
Municipal Portfolio (currently known as Spartan New York Intermediate
Municipal Income Fund) and Fidelity Management & Research Company, dated
December 17, 1993, is incorporated herein by reference to Exhibit 5(a) of
Post-Effective Amendment No. 30.
(b) Management Contract between Fidelity New York Tax-Free High Yield
Portfolio (currently known as Fidelity New York Municipal Income Fund) and
Fidelity Management & Research Company, dated February 1, 1994, is
incorporated herein by reference to Exhibit 5(b) to Post-Effective
Amendment No. 35.
(c) Management Contract between Fidelity New York Tax-Free Insured
Portfolio (currently known as Fidelity New York Insured Municipal Income
Fund) and Fidelity Management & Research Company, dated February 1, 1994,
is incorporated herein by reference to Exhibit 5(c) to Post-Effective
Amendment No. 35.
(d) Management Contract between Spartan New York Municipal High Yield
Portfolio (currently known as Spartan New York Municipal Income Fund) and
Fidelity Management & Research Company, dated January 18, 1990, is
incorporated herein by reference to Exhibit 5(d) to Post-Effective
Amendment No. 33.
(6) (a) General Distribution Agreement between Fidelity New York Tax-Free
Insured Portfolio (currently known as Fidelity New York Insured Municipal
Income Fund) and Fidelity Distributors Corporation, dated April 1, 1987, is
incorporated herein by reference to Exhibit 6(a) to Post-Effective
Amendment No. 33.
(b) General Distribution Agreement between Fidelity New York Tax-Free
High Yield Portfolio (currently known as Fidelity New York Municipal Income
Fund) and Fidelity Distributors Corporation, dated April 1, 1987, is
incorporated herein by reference to Exhibit 6(b) to Post-Effective
Amendment No. 33.
(c) Amendment to General Distribution Agreements between Fidelity New
York Tax-Free Insured Portfolio (currently known as Fidelity New York
Insured Municipal Income Fund) and Fidelity Distributors Corporation and
Fidelity New York Tax-Free High Yield Portfolio (currently known as
Fidelity New York Municipal Income Fund) and Fidelity Distributors
Corporation, dated January 1, 1988, is incorporated herein by reference to
Exhibit 6(c) to Post-Effective Amendment No. 33.
(d) General Distribution Agreement between Spartan New York Municipal
High Yield Portfolio (currently known as Spartan New York Municipal Income
Fund) and Fidelity Distributors Corporation, dated January 18, 1990, is
incorporated herein by reference to Exhibit 6(d) to Post-Effective
Amendment No. 33.
(e) General Distribution Agreement between Spartan New York Intermediate
Municipal Portfolio (currently known as Spartan New York Intermediate
Municipal Income Fund) and Fidelity Distributors Corporation, dated
December 17, 1993, is incorporated herein by reference to Exhibit 6(f) to
Post-Effective Amendment No. 30.
(7) (a) Retirement Plan for Non-Interested Person
Trustees, Directors or General Partners, is incorporated herein by
reference to Exhibit 7 of Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(b) The Fee Deferrral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of December 1, 1995, is
incorporated herein by reference to Exhibit 7(b) of Fidelity School Street
Trust's (File No. 2-57167) Post-Effective Amendment No. 47.
(8) Custodian Agreement, Appendix A, Appendix B, and Appendix C, dated
December 1, 1994, between UMB Bank, n.a. and the Registrant is incorporated
herein by reference to Exhibit 8 to Fidelity California Municipal Trust's
Post-Effective Amendment No. 28 (File No. 2-83367).
(9) Not applicable.
(10) Not applicable.
(11) Consent of Price Waterhouse LLP is filed herein as Exhibit 11.
(12) Not applicable.
(13) Not applicable.

(14) (a) Fidelity Individual Retirement Account Custodial Agreement and
Disclosure Statement, as currently in effect, is incorporated herein by
reference to Exhibit 14(a) of Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(b) Fidelity Institutional Individual Retirement Account Custodial
Agreement and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(d) of Fidelity Union Street Trust's (File
No. 2-50318) Post-Effective Amendment No. 87.
(c) National Financial Services Corporation Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(h) of Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(d) Fidelity Portfolio Advisory Services Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(i) of Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(e) Fidelity 403(b)(7) Custodial Account Agreement, as currently in
effect, is incorporated herein by reference to Exhibit 14(e) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(f) National Financial Services Corporation Defined Contribution
Retirement Plan and Trust Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(k) of Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(g) The CORPORATEplan for Retirement Profit Sharing/401K Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(l)
of Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(h) The CORPORATEplan for Retirement Money Purchase Pension Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(m)
of Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(i) Fidelity Investments Section 403(b)(7) Individual Custodial Account
Agreement and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(f) of Fidelity Commonwealth Trust's (File
No. 2-52322) Post Effective Amendment No. 57.
(j) Plymouth Investments Defined Contribution Retirement Plan and Trust
Agreement, as currently in effect, is incorporated herein by reference to
Exhibit 14(o) of Fidelity Commonwealth Trust's (File No. 2-52322) Post
Effective Amendment No. 57.
(k) The Fidelity Prototype Defined Benefit Pension Plan and Trust Basic
Plan Document and Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) of Fidelity Securities
Fund's (File No. 2-93601) Post Effective Amendment No. 33.
(l) The Institutional Prototype Plan Basic Plan Document, Standardized
Adoption Agreement, and Non-Standardized Adoption Agreement, as currently
in effect, is incorporated herein by reference to Exhibit 14(o) of Fidelity
Securities Fund's (File No. 2-93601) Post Effective Amendment No. 33.
(m) The CORPORATEplan for Retirement 100SM Profit Sharing/401(k) Basic
Plan Document, Standardized Adoption Agreement, and Non-Standardized
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(f) of Fidelity Securities Fund's (File No. 2-93601)
Post Effective Amendment No. 33.
(n) The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt
Employers Basic Plan Document, Standardized Profit Sharing Plan Adoption
Agreement, Non-Standardized Discretionary Contribution Plan No. 002
Adoption Agreement, and Non-Standardized Discretionary Contribution Plan
No. 003 Adoption Agreement, as currently in effect, is incorporated herein
by reference to Exhibit 14(g) of Fidelity Securities Fund's (File No.
2-93601) Post Effective Amendment No. 33.
(o) Fidelity Investments 403(b) Sample Plan Basic Plan Document and
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(p) of Fidelity Securities Fund's (File No. 2-93601)
Post Effective Amendment No. 33.
(p) Fidelity Defined Contribution Retirement Plan and Trust Agreement, as
currently in effect, is incorporated herein by reference to Exhibit 14(c)
of Fidelity Securities Fund's (File No. 2-93601) Post Effective Amendment
No. 33.
(15) (a) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
New York Tax-Free High Yield Portfolio (currently known as Fidelity New
York Municipal Income Fund) is incorporated herein by reference to Exhibit
15(a) to Post-Effective Amendment No. 33.
(b) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity New
York Tax-Free Insured Portfolio (currently known as Fidelity New York
Insured Municipal Income Fund) is incorporated herein by reference to
Exhibit 15(b) to Post-Effective Amendment No. 33.
(c) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan New
York Municipal High Yield Portfolio (currently known as Spartan New York
Municipal Income Fund) is incorporated herein by reference to Exhibit 15(c)
to Post-Effective Amendment No. 33.
(d) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan New
York Intermediate Municipal Portfolio (currently known as Spartan New York
Intermediate Municipal Income Fund) is incorporated herein by reference to
Exhibit 15(e) to Post-Effective Amendment No. 28.
(16) (a) A schedule for the computation of performance calculations for
Fidelity New York Tax-Free Insured Portfolio (currently known as Fidelity
New York Insured Municipal Income Fund) on behalf of the trust is filed
herein as Exhibit 16(a).
(b) A schedule for computation of adjusted NAVs for Fidelity New York
Tax-Free Insured Portfolio (currently known as Fidelity New York Insured
Municipal Income Fund) on behalf of the trust is incorporated herein by
reference to Exhibit 16(b) to Post-Effective Amendment No. 33.

(17) Financial Data Schedules for the funds are filed herein as Exhibit
27.
(18) Not applicable.

Item 25. Persons Controlled by or under Common Control with Registrant
The Registrant's Board of Trustees is the same as the boards of other
funds advised by FMR, each of which has Fidelity Management & Research
Company as its investment adviser. In addition, the officers of these
funds are substantially identical. Nonetheless, Registrant takes the
position that it is not under common control with these other funds since
the power residing in the respective boards and officers arises as the
result of an official position with the respective funds.
Item 26. Number of Holders of Securities
January 31, 1996
Title of Class: Shares of Beneficial Interest
Name of Series Number of Record Holders
Fidelity New York Insured Municipal Income Fund 9226

Fidelity New York Municipal Income Fund 11,338

Spartan New York Municipal Income Fund 5,713

Spartan New York Intermediate Municipal Income Fund 98
4

Item 27. 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
Registrant 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 in connection with any claim, action, suit, or
proceeding in which he is involved by virtue of his service as a Trustee,
an officer, or both. Additionally, amounts paid or incurred in settlement
of such matters are covered by this indemnification. Indemnification will
not be provided in certain circumstances, however. These include instances
of willful misfeasance, bad faith, gross negligence, and reckless disregard
of the duties involved in the conduct of the particular office involved.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
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 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 Registrant
included a materially misleading statement or omission. However, the
Registrant 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 Registrant by or on behalf
of the Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of willful
misfeasance, bad faith, gross negligence, and reckless disregard of the
obligations and duties under the Distribution Agreement.
Pursuant to the agreement by which Fidelity Service Company ("Service") is
appointed sub-transfer agent, the Transfer Agent agrees to indemnify
Service for its losses, claims, damages, liabilities and expenses to the
extent the Transfer Agent is entitled to and receives indemnification from
the Registrant for the same events. Under the Transfer Agency Agreement,
the Registrant agrees to indemnify and hold the Transfer Agent harmless
against any losses, claims, damages, liabilities, or expenses resulting
from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, which names the Transfer Agent and/or the Registrant as a party
and is not based on and does not result from the Transfer Agent's willful
misfeasance, bad faith, negligence or reckless disregard of its 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, negligence or
reckless disregard of its duties) which results from the negligence of the
Registrant, 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 Registrant, 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 Registrant, 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 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
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.

<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman of
the Board and a Director of FMR, FMR Corp., FMR Texas
Inc., Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.; President
and Trustee of funds advised by FMR.

J. Gary Burkhead President of FMR; Managing Director of FMR Corp.;
President and a Director of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.; Senior Vice
President and Trustee of funds advised by FMR.

Peter S. Lynch Vice Chairman and Director of FMR.

Robert Beckwitt Vice President of FMR and of funds advised by FMR.

David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.

Stephan Campbell Vice President of FMR (1993).

Dwight Churchill Vice President of FMR (1993).

William Danoff Vice President of FMR (1993) and of a fund advised by
FMR.

Scott DeSano Vice President of FMR (1993).

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

Larry Domash Vice President of FMR (1993).

George Domolky Vice President of FMR (1993) and of a fund advised by
FMR.

Robert K. Duby Vice President of FMR.

Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.

Kathryn L. Eklund Vice President of FMR.

Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised
by FMR.

Daniel R. Frank Vice President of FMR and of funds advised by FMR.

Michael S. Gray Vice President of FMR and of funds advised by FMR.

Lawrence Greenberg Vice President of FMR (1993).

Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.

William J. Hayes Senior Vice President of FMR; Equity Division Leader.

Robert Haber Vice President of FMR and of funds advised by FMR.

Richard Haberman Senior Vice President of FMR (1993).

Daniel Harmetz Vice President of FMR and of a fund advised by FMR.

Ellen S. Heller Vice President of FMR.

</TABLE>

John Hickling Vice President of FMR (1993) and of funds advised by
FMR.

Robert F. Hill Vice President of FMR; Director of Technical Research.

Curtis Hollingsworth Vice President of FMR (1993).

Stephen P. Jonas Treasurer and Vice President of FMR (1993)); Treasurer of
FMR Texas Inc. (1993), Fidelity Management & Research
(U.K.) Inc. (1993), and Fidelity Management & Research
(Far East) Inc. (1993).

David B. Jones Vice President of FMR (1993).

Steven Kaye Vice President of FMR (1993) and of a fund advised by
FMR.

Frank Knox Vice President of FMR (1993).

Robert A. Lawrence Senior Vice President of FMR (1993); High Income
Division Leader.

Alan Leifer Vice President of FMR and of a fund advised by FMR.

Harris Leviton Vice President of FMR (1993) and of a fund advised by
FMR.

Bradford E. Lewis Vice President of FMR and of funds advised by FMR.

Malcolm W. MacNaught III Vice President of FMR (1993).

Robert H. Morrison Vice President of FMR; Director of Equity Trading.

David Murphy Vice President of FMR and of funds advised by FMR.

Andrew Offit Vice President of FMR (1993).

Judy Pagliuca Vice President of FMR (1993).

Jacques Perold Vice President of FMR.

Anne Punzak Vice President of FMR and of funds advised by FMR.

Lee Sandwen Vice President of FMR (1993).

Patricia A. Satterthwaite Vice President of FMR (1993) and of a fund advised by
FMR.

Thomas T. Soviero Vice President of FMR (1993).

Richard Spillane Vice President of FMR; Senior Vice President and Director
of Operations and Compliance of FMR U.K. (1993).

Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised
by FMR.

Gary L. Swayze Vice President of FMR and of funds advised by FMR;
Tax-Free Fixed-Income Group Leader.

Thomas Sweeney Vice President of FMR (1993).

Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised
by FMR.

Joel Tillinghast Vice President of FMR (1993) and of a fund advised by
FMR.

Robert Tucket Vice President of FMR (1993).

George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR; Growth Group Leader.

Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised
by FMR.

Arthur S. Loring Senior Vice President (1993), Clerk, and General Counsel
of FMR; Vice President, Legal of FMR Corp.; Secretary of
funds advised by FMR.

</TABLE>

Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR.
(b)

Name and Principal Positions and Offices Positions and Offices

Business Address* With Underwriter With Registrant

Edward C. Johnson 3d Director Trustee and President

W. Humphrey Bogart Director None

Kurt A. Lange President and Treasurer None

Thomas W. Littauer Senior Vice President None

Arthur S. Loring Vice President and Clerk Secretary

* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity Service
Co., 82 Devonshire Street, Boston, MA 02109, or the funds' custodian UMB
Bank, n.a., 1010 Grand Avenue, Kansas City, MO.

Item 31. Management Services
Not applicable.

Item 32. Undertakings
The Registrant on behalf of Fidelity New York Municipal Income Fund,
Fidelity New York Insured Municipal Income Fund, Spartan New York Municipal
Income Fund, and Spartan New York Intermediate Municipal Income 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.
The Registrant undertakes for Spartan New York Intermediate Municipal
Income Fund: (1) to call a meeting of shareholders for the purpose of
voting upon the question of removal of a trustee or trustees, when
requested to do so by record holders of not less than 10% of its
outstanding shares; and (2) to assist in communications with other
shareholders pursuant to Section 16(c) (1) and (2), whenever shareholders
meeting the qualifications set forth in Section 16 (c) seek the opportunity
to communicate with other shareholders with a view toward requesting a
meeting.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 36 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston, and Massachusetts, on the 17th day of March 1996.
FIDELITY NEW YORK 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.
(Signature) (Title) (Date)

<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee March 17, 1996

Edward C. Johnson 3d (Principal Executive Officer)

</TABLE>

/s/Kenneth A. Rathgeber Treasurer March 17, 1996

Kenneth A. Rathgeber

/s/J. Gary Burkhead Trustee March 17, 1996

J. Gary Burkhead

/s/Ralph F. Cox * Trustee March 17, 1996

Ralph F. Cox

/s/Phyllis Burke Davis * Trustee March 17, 1996

Phyllis Burke Davis

/s/Richard J. Flynn * Trustee March 17, 1996

Richard J. Flynn

/s/E. Bradley Jones * Trustee March 17, 1996

E. Bradley Jones

/s/Donald J. Kirk * Trustee March 17, 1996

Donald J. Kirk

/s/Peter S. Lynch * Trustee March 17, 1996

Peter S. Lynch

/s/Edward H. Malone * Trustee March 17, 1996

Edward H. Malone

/s/Marvin L. Mann_____* Trustee March 17, 1996

Marvin L. Mann

/s/Gerald C. McDonough* Trustee March 17, 1996

Gerald C. McDonough

/s/Thomas R. Williams * Trustee March 17, 1996

Thomas R. Williams

(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated December 15, 1994 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated December 15, 1994 and filed herewith.
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:

<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Annuity Fund Fidelity Income Fund
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VI Fidelity Municipal Trust
Fidelity Advisor Series VII Fidelity New York Municipal Trust
Fidelity Advisor Series VIII Fidelity Puritan Trust
Fidelity California Municipal Trust Fidelity School Street Trust
Fidelity Capital Trust Fidelity Securities Fund
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Corporate Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Court Street Trust Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust

</TABLE>

plus any other investment company for which Fidelity Management & Research
Company acts as investment adviser and for which the undersigned
individuals serve as Board Members (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Djinis, 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 Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, 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 deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS our hands on this fifteenth day of December, 1994.
/s/Edward C. Johnson 3d /s/Donald J. Kirk

Edward C. Johnson 3d Donald J. Kirk

/s/J. Gary Burkhead /s/Peter S. Lynch

J. Gary Burkhead Peter S. Lynch

/s/Ralph F. Cox /s/Marvin L. Mann

Ralph F. Cox Marvin L. Mann

/s/Phyllis Burke Davis /s/Edward H. Malone

Phyllis Burke Davis Edward H. Malone

/s/Richard J. Flynn /s/Gerald C. McDonough

Richard J. Flynn Gerald C. McDonough

/s/E. Bradley Jones /s/Thomas R. Williams

E. Bradley Jones Thomas R. Williams

POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:

<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Annuity Fund Fidelity Institutional Trust
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series II Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Money Market Trust
Fidelity Advisor Series V Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VI Fidelity Municipal Trust
Fidelity Advisor Series VII Fidelity New York Municipal Trust
Fidelity Advisor Series VIII Fidelity Puritan Trust
Fidelity California Municipal Trust Fidelity School Street Trust
Fidelity Capital Trust Fidelity Securities Fund
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Corporate Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Court Street Trust Fidelity U.S. Investments-Government Securities
Fidelity Destiny Portfolios Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Spartan U.S. Treasury Money Market
Fidelity Exchange Fund Fund
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
Fidelity Government Securities Fund
Fidelity Hastings Street Trust
Fidelity Income Fund

</TABLE>

plus any other investment company for which Fidelity Management & Research
Company acts as investment adviser and for which the undersigned individual
serves as President and Board Member (collectively, the "Funds"), hereby
severally constitute and appoint J. Gary Burkhead, my true and lawful
attorney-in-fact, with full power of substitution, and with full power to
sign for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, 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 behalf in connection therewith as said attorney-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and 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.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d December 15, 1994

Edward C. Johnson 3d

Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectuses
and Statements of Additional Information in Post-Effective Amendment No. 36
to the Registration Statement on Form N-1A of Fidelity New York Municipal
Trust: Fidelity New York Municipal Income Fund (formerly known as Fidelity
New York Tax-Free High Yield Portfolio), Fidelity New York Insured
Municipal Income Fund (formerly known as Fidelity New York Tax-Free Insured
Portfolio), Spartan New York Municipal Income Fund (formerly known as
Spartan New York Municipal High Yield Portfolio), and Spartan New York
Intermediate Municipal Income Fund (formerly known as Spartan New York
Intermediate Municipal Portfolio), of our reports dated March 4, 1996 on
the financial statements and financial highlights included in the January
31, 1996 Annual Reports to Shareholders of Fidelity New York Municipal
Income Fund, Fidelity New York Insured Municipal Income Fund, Spartan New
York Municipal Income Fund and Spartan New York Intermediate Municipal
Income Fund.
We also consent to the incorporation by reference in this Post-Effective
Amendment, of our reports dated March 4, 1996 on the financial statements
and financial highlights included in the Annual Reports to Shareholders of
Fidelity New York Municipal Trust II: Fidelity New York Municipal Money
Market Fund (formerly known as Fidelity New York Tax-Free Money Market
Portfolio), and Spartan New York Municipal Money Market Fund (formerly
known as Spartan New York Municipal Money Market Portfolio.)
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectuses and "Auditor" in the Statements
of Additional Information.

/s/PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Boston, Massachusetts
March 18, 1996

Exhibit 16A
SCHEDULE FOR COMPUTATION OF PERFORMANCE CALCULATIONS
CUMULATIVE TOTAL RETURNS and their income and capital components are
described in the fund's Statement of Additional Information, and are based
on the net asset values, dividends, capital gain distributions, and
reinvestment prices of the historical period covered.
AVERAGE ANNUAL RETURNS are calculated according to the following formula:
Average Annual Return = [(1 + Cumulative Return)1/n] - 1
[where n = the number of years in the base period]
Included in this exhibit is a chart showing the data used to calculate the
30-Day Yield as of the fund's fiscal year end.
The 30-DAY YIELD is calculated according to the methods prescribed in Form
N-1A Item 22(b)(ii).
30-Day Total Net Income
30-Day Yield = 2<UNDEF>(--------------------------------------------------)
+ 1)6 - 1<UNDEF>
(30-Day Average Shares Outstanding)(Prior Day Price)
The TAX EQUIVALENT YIELD is calculated by the formula as follows:
Tax Equivalent Yield = (yield) / (1-[tax rate])
[where the tax rate is expressed in decimal notation (i.e. 28% = 0.28)]
For any municipal portfolio that invests a portion of its assets in
obligations subject to state taxes, the tax equivalent yield is adjusted to
reflect these investments.
Exhibit 16(a)

<TABLE>
<CAPTION>
<S> <C>
1 FIDELITY FUNDS 1 95-1 NEW YORK INSURED SC43181 Page 1

REPORT #R430MA 30 DAY DIVIDEND HISTORY RUN DATE: 02/15/96 TIME: 14:25

From 19960102 To 19960201

INCOME W/

SHARES GROSS WRITE BREAKAGE &

DATE OUTSTANDING INCOME EXPENSES NET INCOME ADJUSTMENTS OFF BREAKAGE WRITE OFF

___________________________________________________________________________________________________________________

2 28,476,574.712 48,192.57- 5,190.45- 43,002.12- 86,344.19 0.00 6.63- 43,334.72

3 28,486,067.825 47,913.63 5,191.84 42,721.79 86,344.19 0.00 13.94- 42,715.16

4 28,499,189.740 48,060.73 5,205.31 42,855.42 86,344.19 0.00 7.20 42,841.48

5 28,437,977.867 47,949.27 5,195.53 42,753.74 86,344.19 0.00 9.78- 42,760.94

6 28,437,977.867 47,871.74 5,195.53 42,676.21 86,344.19 0.00 9.46 42,666.43

7 28,437,977.867 47,871.74 5,195.53 42,676.21 86,344.19 0.00 0.27 42,685.67

8 28,393,096.429 47,872.07 5,165.87 42,706.20 86,344.19 0.00 3.25 42,706.47

9 28,389,297.275 47,950.16 5,165.07 42,785.09 86,344.19 0.00 5.67 42,788.34

10 28,384,743.903 48,160.92 5,164.33 42,996.59 86,344.19 0.00 0.63- 43,002.26

11 28,389,601.071 47,895.25 5,149.49 42,745.76 86,344.19 0.00 9.61- 42,745.13

12 28,368,517.001 47,836.48 5,149.25 42,687.23 86,344.19 0.00 11.37 42,677.62

13 28,368,517.001 47,800.18 5,149.25 42,650.93 86,344.19 0.00 3.95- 42,662.30

14 28,368,517.001 47,800.18 5,149.25 42,650.93 86,344.19 0.00 9.10 42,646.98

15 28,389,629.463 47,800.42 5,145.09 42,655.33 86,344.19 0.00 5.18- 42,664.43

16 28,403,283.288 47,800.33 5,147.83 42,652.50 86,344.19 0.00 13.99 42,647.32

17 28,426,557.030 47,829.69 5,160.66 42,669.03 86,344.19 0.00 13.67- 42,683.02

18 28,550,764.961 47,810.82 9,375.53 38,435.29 90,536.66 0.00 12.20- 42,614.09

19 28,557,670.994 47,903.34 5,199.42 42,703.92 90,536.66 0.00 2.00- 42,691.72

20 28,557,670.994 47,887.45 5,199.42 42,688.03 90,536.66 0.00 7.69- 42,686.03

21 28,557,670.994 47,887.45 5,199.42 42,688.03 90,536.66 0.00 13.38- 42,680.34

22 28,544,290.501 47,887.37 5,207.52 42,679.85 90,536.66 0.00 7.24- 42,666.47

23 28,528,004.637 47,881.33 5,200.05 42,681.28 90,536.66 0.00 3.85- 42,674.04

24 28,413,943.319 47,856.03 5,187.79 42,668.24 90,536.66 0.00 13.35- 42,664.39

25 28,413,478.416 47,956.95 4,098.87 43,858.08 89,449.66 0.00 4.56- 42,757.73

26 28,407,610.650 48,049.66 5,171.74 42,877.92 89,449.66 0.00 6.28 42,873.36

27 28,407,610.650 47,693.03 5,171.74 42,521.29 89,449.66 0.00 1.38 42,527.57

28 28,407,610.650 47,693.03 5,171.74 42,521.29 89,449.66 0.00 3.52- 42,522.67

29 28,400,548.308 47,682.49 5,177.27 42,505.22 89,449.66 0.00 13.92- 42,501.70

30 28,404,954.006 48,408.26 5,172.02 43,236.24 89,449.66 0.00 10.02- 43,222.32

31 28,406,650.954 48,095.07 5,190.40 42,904.67 89,449.66 0.00 0.61 42,894.65

1 28,468,853.620 48,043.35 5,442.94 42,600.41 89,449.66 0.00 11.61 42,601.02

_______________

0.00

1 FIDELITY FUNDS 1 95-1 NEW YORK INSURED SC43181 Page 2

REPORT #R430MA 30 DAY DIVIDEND HISTORY RUN DATE: 02/15/96 TIME: 14:25

From 19960102 To 19960201

MTD DAILY DIST DIVIDEND -------- SHARES OUTSTANDING -------- DAILY

DATE MIL RATE MIL RATE YIELD PAID | 30-DAY TOTAL 30-DAY AVERAGE | YTM INCOME

_____________________________________________________________________________________________________________________

2 0.001522000 0.003043000 4.70 43,341.35 852,305,672.183 28,410,189.073 46,961.55

3 0.001500000 0.004543000 4.63 42,729.10 852,379,399.520 28,412,646.651 45,279.48

4 0.001503000 0.006046000 4.63 42,834.28 852,474,088.309 28,415,802.944 45,301.94

5 0.001504000 0.007550000 4.64 42,770.72 852,472,056.526 28,415,735.218 45,269.08

6 0.001500000 0.009050000 4.65 42,656.97 852,455,583.604 28,415,186.120 45,515.22

7 0.001501000 0.010551000 4.65 42,685.40 852,425,957.815 28,414,198.594 45,515.22

8 0.001504000 0.012055000 4.66 42,703.22 852,351,450.588 28,411,715.020 45,515.22

9 0.001507000 0.013562000 4.67 42,782.67 852,273,144.207 28,409,104.807 45,584.08

10 0.001515000 0.015077000 4.70 43,002.89 852,219,435.774 28,407,314.526 45,816.29

11 0.001506000 0.016583000 4.69 42,754.74 852,185,979.725 28,406,199.324 45,780.72

12 0.001504000 0.018087000 4.68 42,666.25 852,151,834.332 28,405,061.144 45,723.89

13 0.001504000 0.019591000 4.68 42,666.25 852,129,115.397 28,404,303.847 45,713.16

14 0.001503000 0.021094000 4.68 42,637.88 852,110,739.586 28,403,691.320 45,713.16

15 0.001503000 0.022597000 4.68 42,669.61 852,113,476.237 28,403,782.541 45,713.16

16 0.001501000 0.024098000 4.67 42,633.33 852,129,866.713 28,404,328.890 45,702.71

17 0.001502000 0.025600000 4.67 42,696.69 852,210,322.294 28,407,010.743 45,527.90

18 0.001493000 0.027093000 4.62 42,626.29 852,421,404.864 28,414,046.829 45,272.55

19 0.001495000 0.028588000 4.62 42,693.72 852,625,570.607 28,420,852.354 45,278.15

20 0.001495000 0.030083000 4.61 42,693.72 852,837,962.043 28,427,932.068 45,148.22

21 0.001495000 0.031578000 4.61 42,693.72 852,974,375.699 28,432,479.190 45,148.22

22 0.001495000 0.033073000 4.61 42,673.71 853,097,408.862 28,436,580.295 45,148.22

23 0.001496000 0.034569000 4.62 42,677.89 853,204,156.161 28,440,138.539 45,231.86

24 0.001502000 0.036071000 4.64 42,677.74 853,196,842.142 28,439,894.738 45,279.45

25 0.001505000 0.037576000 4.64 42,762.29 853,182,540.155 28,439,418.005 45,263.74

26 0.001509000 0.039085000 4.68 42,867.08 853,177,354.629 28,439,245.154 45,711.57

27 0.001497000 0.040582000 4.63 42,526.19 853,169,090.724 28,438,969.691 45,168.09

28 0.001497000 0.042079000 4.63 42,526.19 853,183,489.057 28,439,449.635 45,168.09

29 0.001497000 0.043576000 4.63 42,515.62 853,190,825.048 28,439,694.168 45,168.09

30 0.001522000 0.045098000 4.71 43,232.34 853,202,566.737 28,440,085.558 45,950.68

31 0.001510000 0.046608000 4.65 42,894.04 853,216,005.374 28,440,533.512 45,585.36

1 0.001496000 0.001496000 4.60 42,589.41 853,208,284.282 28,440,276.143 45,288.43

_______________

1,324,881.30

1 FIDELITY FUNDS 1 95-1 NEW YORK INSURED SC43181 Page 3

REPORT #R430MA 30 DAY DIVIDEND HISTORY RUN DATE: 02/15/96 TIME: 14:25

From 19960102 To 19960201

DAILY YTM NET DAILY YTM PAYDOWN ADJ TO 30-DAY YTM 30-DAY 30-DAY 30-DAY DAILY SEC PRIOR

DATE INCOME ADJ NET INCOME GAIN/LOSS INCOME NET INCOME MIL RATE YIELD YIELD DAY NAV

_________________________________________________________________________________________________________________

2 0.00 41,779.33 0.00 0.00 1,226,079.82 0.043160000 4.42 4.54 11.83

3 0.00 40,087.64 0.00 0.00 1,225,362.69 0.043131000 4.42 4.35 11.82

4 0.00 40,096.63 0.00 0.00 1,225,257.61 0.043124000 4.41 4.34 11.85

5 0.00 40,073.55 0.00 0.00 1,225,195.04 0.043117000 4.41 4.34 11.83

6 0.00 40,319.69 0.00 0.00 1,225,736.92 0.043136000 4.44 4.40 11.77

7 0.00 40,319.69 0.00 0.00 1,225,782.51 0.043138000 4.44 4.40 11.77

8 0.00 40,349.35 0.00 0.00 1,225,604.40 0.043134000 4.44 4.40 11.77

9 0.00 40,419.01 0.00 0.00 1,225,495.95 0.043133000 4.44 4.41 11.77

10 0.00 40,651.96 0.00 0.00 1,225,619.80 0.043142000 4.44 4.44 11.77

11 0.00 40,631.23 0.00 0.00 1,228,511.64 0.043246000 4.47 4.46 11.72

12 0.00 40,574.64 0.00 0.00 1,228,658.30 0.043253000 4.47 4.45 11.72

13 0.00 40,563.91 0.00 0.00 1,228,326.46 0.043243000 4.47 4.45 11.72

14 0.00 40,563.91 0.00 0.00 1,227,574.76 0.043218000 4.47 4.45 11.72

15 0.00 40,568.07 0.00 0.00 1,227,051.41 0.043200000 4.46 4.45 11.72

16 0.00 40,554.88 0.00 0.00 1,226,514.87 0.043181000 4.46 4.45 11.72

17 0.00 40,367.24 0.00 0.00 1,225,784.69 0.043155000 4.45 4.41 11.75

18 0.00 40,089.49 0.00 0.00 1,224,438.36 0.043103000 4.42 4.36 11.80

19 0.00 40,078.73 0.00 0.00 1,222,998.04 0.043042000 4.41 4.33 11.82

20 0.00 39,948.80 0.00 0.00 1,221,756.60 0.042988000 4.40 4.31 11.84

21 0.00 39,948.80 0.00 0.00 1,220,103.60 0.042919000 4.39 4.31 11.84

22 0.00 39,940.70 0.00 0.00 1,218,936.07 0.042871000 4.38 4.31 11.84

23 0.00 40,031.81 0.00 0.00 1,217,859.65 0.042827000 4.38 4.33 11.83

24 0.00 40,091.66 0.00 0.00 1,216,843.08 0.042786000 4.39 4.34 11.81

25 0.00 40,077.87 0.00 0.00 1,215,836.80 0.042751000 4.38 4.35 11.83

26 0.00 40,539.83 0.00 0.00 1,215,387.60 0.042736000 4.39 4.42 11.78

27 0.00 39,996.35 0.00 0.00 1,215,160.10 0.042728000 4.38 4.36 11.80

28 0.00 39,996.35 0.00 0.00 1,213,993.53 0.042688000 4.38 4.36 11.80

29 0.00 39,990.82 0.00 0.00 1,212,206.88 0.042624000 4.37 4.35 11.80

30 0.00 40,778.66 0.00 0.00 1,211,208.07 0.042589000 4.37 4.45 11.79

31 0.00 40,394.96 0.00 0.00 1,209,825.56 0.042539000 4.35 4.38 11.85

1 0.00 39,845.49 0.00 0.00 1,207,891.72 0.042471000 4.33 4.31 11.88

avg: 11.79

</TABLE>

<ARTICLE> 6
<CIK> 0000718581
<NAME> Fidelity New York Municipal Trust
<SERIES>
<NUMBER> 21
<NAME> Fidelity New York Tax-Free High Yield Portfolio
<MULTIPLIER> 1,000

<S>
<C>
<PERIOD-TYPE> year

<FISCAL-YEAR-END> jan-31-1996

<PERIOD-END> jan-31-1996

<INVESTMENTS-AT-COST> 403,566

<INVESTMENTS-AT-VALUE> 427,844

<RECEIVABLES> 6,914

<ASSETS-OTHER> 0

<OTHER-ITEMS-ASSETS> 0

<TOTAL-ASSETS> 434,758

<PAYABLE-FOR-SECURITIES> 0

<SENIOR-LONG-TERM-DEBT> 0

<OTHER-ITEMS-LIABILITIES> 1,080

<TOTAL-LIABILITIES> 1,080

<SENIOR-EQUITY> 0

<PAID-IN-CAPITAL-COMMON> 415,509

<SHARES-COMMON-STOCK> 34,592

<SHARES-COMMON-PRIOR> 34,668

<ACCUMULATED-NII-CURRENT> 62

<OVERDISTRIBUTION-NII> 0

<ACCUMULATED-NET-GAINS> (6,195)

<OVERDISTRIBUTION-GAINS> 0

<ACCUM-APPREC-OR-DEPREC> 24,302

<NET-ASSETS> 433,678

<DIVIDEND-INCOME> 0

<INTEREST-INCOME> 24,548

<OTHER-INCOME> 0

<EXPENSES-NET> 2,453

<NET-INVESTMENT-INCOME> 22,095

<REALIZED-GAINS-CURRENT> 2,258

<APPREC-INCREASE-CURRENT> 38,620

<NET-CHANGE-FROM-OPS> 62,973

<EQUALIZATION> 0

<DISTRIBUTIONS-OF-INCOME> 22,338

<DISTRIBUTIONS-OF-GAINS> 0

<DISTRIBUTIONS-OTHER> 0

<NUMBER-OF-SHARES-SOLD> 9,306

<NUMBER-OF-SHARES-REDEEMED> 10,843

<SHARES-REINVESTED> 1,461

<NET-CHANGE-IN-ASSETS> 39,444

<ACCUMULATED-NII-PRIOR> 0

<ACCUMULATED-GAINS-PRIOR> (8,115)

<OVERDISTRIB-NII-PRIOR> 0

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<GROSS-ADVISORY-FEES> 1,683

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<GROSS-EXPENSE> 2,497

<AVERAGE-NET-ASSETS> 419,855

<PER-SHARE-NAV-BEGIN> 11.370

<PER-SHARE-NII> .635

<PER-SHARE-GAIN-APPREC> 1.177

<PER-SHARE-DIVIDEND> .642

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<NAME> Fidelity New York Municipal Trust
<SERIES>
<NUMBER> 31
<NAME> Fidelity New York Tax-Free Insured Portfolio
<MULTIPLIER> 1,000

<S>
<C>
<PERIOD-TYPE> year

<FISCAL-YEAR-END> jan-31-1996

<PERIOD-END> jan-31-1996

<INVESTMENTS-AT-COST> 316,157

<INVESTMENTS-AT-VALUE> 334,368

<RECEIVABLES> 4,501

<ASSETS-OTHER> 83

<OTHER-ITEMS-ASSETS> 0

<TOTAL-ASSETS> 338,952

<PAYABLE-FOR-SECURITIES> 0

<SENIOR-LONG-TERM-DEBT> 0

<OTHER-ITEMS-LIABILITIES> 781

<TOTAL-LIABILITIES> 781

<SENIOR-EQUITY> 0

<PAID-IN-CAPITAL-COMMON> 323,075

<SHARES-COMMON-STOCK> 28,469

<SHARES-COMMON-PRIOR> 28,710

<ACCUMULATED-NII-CURRENT> 0

<OVERDISTRIBUTION-NII> 0

<ACCUMULATED-NET-GAINS> (3,115)

<OVERDISTRIBUTION-GAINS> 0

<ACCUM-APPREC-OR-DEPREC> 18,211

<NET-ASSETS> 338,171

<DIVIDEND-INCOME> 0

<INTEREST-INCOME> 17,920

<OTHER-INCOME> 0

<EXPENSES-NET> 1,914

<NET-INVESTMENT-INCOME> 16,006

<REALIZED-GAINS-CURRENT> (113)

<APPREC-INCREASE-CURRENT> 30,303

<NET-CHANGE-FROM-OPS> 46,195

<EQUALIZATION> 0

<DISTRIBUTIONS-OF-INCOME> 16,176

<DISTRIBUTIONS-OF-GAINS> 0

<DISTRIBUTIONS-OTHER> 0

<NUMBER-OF-SHARES-SOLD> 5,049

<NUMBER-OF-SHARES-REDEEMED> 6,355

<SHARES-REINVESTED> 1,065

<NET-CHANGE-IN-ASSETS> 27,259

<ACCUMULATED-NII-PRIOR> 0

<ACCUMULATED-GAINS-PRIOR> (2,838)

<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0

<GROSS-ADVISORY-FEES> 1,307

<INTEREST-EXPENSE> 0

<GROSS-EXPENSE> 1,940

<AVERAGE-NET-ASSETS> 325,988

<PER-SHARE-NAV-BEGIN> 10.830

<PER-SHARE-NII> .562

<PER-SHARE-GAIN-APPREC> 1.056

<PER-SHARE-DIVIDEND> .568

<PER-SHARE-DISTRIBUTIONS> 0

<RETURNS-OF-CAPITAL> 0

<PER-SHARE-NAV-END> 11.880

<EXPENSE-RATIO> 59

<AVG-DEBT-OUTSTANDING> 0

<AVG-DEBT-PER-SHARE> 0

<ARTICLE> 6
<CIK> 0000718581
<NAME> Fidelity New York Municipal Trust
<SERIES>
<NUMBER> 61
<NAME> Spartan New York Municipal High Yield Portfolio
<MULTIPLIER> 1,000

<S>
<C>
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