FIDELITY NEW YORK MUNICIPAL TRUST II, 485BPOS, 1998-03-19

FIDELITY NEW YORK MUNICIPAL TRUST II
485BPOS, 1998-03-19

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 33-42943)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 17
[X]
and
REGISTRATION STATEMENT (No. 811-6398)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 17 [X]
Fidelity New York Municipal Trust II
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-563-7000
Eric D. Roiter, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b).
(X) on (March 23, 1998) pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
( ) on ( ) pursuant to paragraph (a)(1) of Rule 485.
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date
for a previously filed
post-effective amendment.
FIDELITY NEW YORK MUNICIPAL MONEY MARKET FUND
SPARTAN NEW YORK MUNICIPAL MONEY MARKET FUND

CROSS REFERENCE SHEET
FORM N-1A

Item Number Prospectus Section

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 ......... Cover Page; Charter
.........
.........
...

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...... Charter
.........
.........
..

b ......... Charter
.........
.........
..

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 ......... Cover Page; Charter
.........
.........
...

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 ......... *
.........
.........
...

* Not Applicable

CROSS REFERENCE SHEET
(CONTINUED)
FORM N-1A

Item Number Statement of Additional
Information Section

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 ......... *
.........
.........
.

16 a i ......... FMR; Portfolio
......... Transactions
.........
.

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
.

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

20 Distributions and Taxes

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

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

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

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

* 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 each fund's most recent financial report and portfolio
listing, or a copy of the Statement of Additional Information (SAI)
dated March 23, 1998 . The SAI has been filed with the
Securities and Exchange Commission (SEC) and is available along with
other related materials on the SEC's Internet Web site
(http://www.sec.gov). The SAI 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 funds are neither insured nor
guaranteed by the U.S. Government, and there can be no assurance that
the funds will maintain a stable $1.00 share price. The money market
funds may invest a significant percentage of their assets in the
securities of a single issuer and therefore may be riskier than other
types of money market funds.
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 NOR HAS
THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
NYS-pro-0398

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'S
NEW YORK
MUNICIPAL
FUNDS
SPARTAN NEW YORK MUNICIPAL MONEY MARKET FUND
(fund number 422, trading symbol FSNXX)
FIDELITY NEW YORK MUNICIPAL MONEY MARKET FUND
(fund number 092, trading symbol FNYXX)
SPARTAN NEW YORK MUNICIPAL INCOME FUND (FORMERLY FIDELITY NEW YORK
MUNICIPAL INCOME FUND)
(fund number 071, trading symbol FTFMX)
PROSPECTUS
MARCH 23, 1998(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109

CONTENTS

KEY FACTS 5 THE FUNDS AT A GLANCE

5 WHO MAY WANT TO INVEST

7 EXPENSES Each fund's
yearly operating
expenses.

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

15 PERFORMANCE How each
fund has done over
time.

The Funds in 16 CHARTER How each fund
Detail is organized.

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

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

Your Account 20 DOING BUSINESS WITH FIDELITY

20 TYPES OF ACCOUNTS
Different ways to
set up your
account.

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

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

26 INVESTOR SERVICES Services
to help you manage
your account.

Shareholder and 27 DIVIDENDS, CAPITAL GAINS,
Account Policies AND TAXES

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

29 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. Fidelity
Investments Money Management, Inc. (FIMM), a subsidiary of FMR,
chooses investments for Spartan New York Municipal Money Market and
New York Municipal Money Market for which FIMM is currently a
sub-adviser. Beginning January 1, 1999, FIMM will choose investments
for Spartan New York Municipal Income.
As with any mutual fund, there is no assurance that a fund will
achieve its goal.
SPARTAN NY MUNI 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 , 1998, the fund had over $786
million in assets.
NY MUNI 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 , 1998, the fund had over $1.0
billion in assets.
SPARTAN NY MUNI INCOME
GOAL: High current tax-free income for New York
residents.
STRATEGY: Normally invests in inves tment-grade municipal
securities whose interest is free from federal income tax and New York
State and City income taxes. Managed to generally react to changes
in interest rates similarly to municipal bonds with maturities between
eight and 18 years.
SIZE: As of January 31, 1998, the fund had over $1.1 billion
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 income taxes. Each fund's level of risk and potential
reward depend on the quality and maturity of its investments. The
money market funds are managed to keep their share prices stable at
$1.00. The bond fund, with its broader range of investments, has the
potential for higher yields, but also carries 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 the bond fund , 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. Spartan New York
Municipal Money Market and
New York Municipal Money
Market are in the MONEY
MARKET category, and Spartan
New York Municipal Income is
in the INCOME 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)
(checkmark)

EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy,
sell, or exchange shares of a fund. In addition, you may be charged an
annual account maintenance fee if your account balance falls below
$2,500. See "Transaction Details," page , for an explanation of
how and when these charges apply.
Sales charge on purchases None
and reinvested distributions

Deferred sales charge on None
redemptions

Exchange fee

for Spartan NY Muni Money Market $5.00
only

Wire transaction fee

for Spartan NY Muni Money Market $5.00
only

Checkwriting fee, per check written

for Spartan NY Muni Money Market $2.00
only

Account closeout fee

for Spartan NY Muni Money Market $5.00
only

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

THE FEES FOR INDIVIDUAL TRANSACTIONS are waived 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. FMR is responsible for the
payment of all other expenses for Spartan New York Municipal Money
Market with certain limited exceptions. New York Municipal Money
Market and Spartan New York Municipal Income also incur 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 "Breakdown of Expenses"
page ).
The following figures are based on historical expenses , adjusted to
reflect current fees, of each fund and are calculated as a percentage
of average net assets of each fund.
SPARTAN NY MUNI MONEY MARKET
Management fee 0.50%

12b-1 fee None

Other expenses 0.00%

Total fund operating expenses 0.50%

NY MUNI MONEY MARKET
Management fee 0.39 %

12b-1 fee None

Other expenses 0.22%

Total fund operating expenses 0.61%

SPARTAN NY MUNI INCOME
Management fee (after 0.35%
reimbursement)

12b-1 fee None

Other expenses 0.18%

Total fund operating expenses 0.53%
(after reimbursement)

EXAMPLES: Let's say, hypothetically, that each fund's annual return is
5% and that your shareholder transaction expenses and each fund's
annual 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 indicate d and,
for Spartan New York Municipal Money Market , if you leave your
account open:
SPARTAN NY MUNI MONEY MARKET
Accou Acco
nt unt
open clos
ed

1 year $ 5 $ 10

3 years $ 16 $ 21

5 years $ 28 $ 33

10 years $ 63 $ 68

NY MUNI MONEY MARKET
1 year $ 6

3 years $ 20

5 years $ 34

10 years $ 76

SPARTAN NY MUNI INCOME
1 year $ 5

3 years $ 17

5 years $ 30

10 years $ 66

These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected expenses or returns, all of which
may vary.
Effective April 1, 1997, FMR voluntarily agreed to reimburse
Spartan New York Municipal Income to the extent that total operating
expenses (excluding interest, taxes, brokerage commissions and
extraordinary expenses) exceeded 0.55% of its average net assets.
Effective January 9, 1998, FMR has voluntarily agreed, through
December 31, 1999, to reimburse Spartan New York Municipal Income to
the extent that total operating expenses (excluding interest, taxes,
brokerage commissions, and extraordinary expenses) exceed 0.53% of its
average net assets. If these agreements were not in effect, the
management fee, other expenses, and total operating expenses, as a
percentage of average net assets, would have been 0.39%, 0.18%, and
0.57%, respectively.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow have been audited by
Price Waterhouse LLP, independent accountants. These funds'
financial highlights, financial statements, and reports of the
auditor are included in the funds' Annual Reports, and are
incorporated by reference into (are legally a part of) the funds'
SAI. Contact Fidelity for a free copy of an Annual Report or the SAI.
SPARTAN NY MUNI MONEY MARKET

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

Years 1998 1997 1996 1995 1994 1993H 1992G 1991G 1990F
ended
Januar
y 31

Net $ 1. $ 1. $ 1. $ 1. $ 1. $ 1. $ 1. $ 1. $ 1.
asset 000 000 000 000 000 000 000 000 000
value,
beginn
ing of
period

Income .032 .030 .034 .025 .020 .018 .037 .052 .013
from
Invest
ment
Operat
ions
Net
intere
st
income

Less (.0 (.0 (.0 (.0 (.0 (.0 (.0 (.0 (.0
Distri 32) 30) 34) 25) 20) 18) 37) 52) 13)
bution
s
From
net
intere
st
incom
e

Net $ 1. $ 1. $ 1. $ 1. $ 1. $ 1. $ 1. $ 1. $ 1.
asset 000 000 000 000 000 000 000 000 000
value,
end of
period

Total 3.2 3.0 3.4 2.5 1.9 1.8 3.7 5.3 1.3
return 6% 7% 6% 6% 9% 5% 8% 7% 1%
B,C

Net $ 787 $ 744 $ 676 $ 571 $ 462 $ 454 $ 475 $ 466 $ 182
assets
, end
of
period
(In
millio
ns)

Ratio .50% .50% .50% .50% .50% .50 .37 .10 00
of %A %D %D %D
expens
es to
averag
e net
assets

Ratio .50% .49 .50% .50% .50% .50 .37% .10% 00%
of %E %A
expens
es to
averag
e net
assets
after
expens
e
reduct
ions

Ratio 3.2 3.0 3.4 2.5 1.9 2.4 3.7 5.1 5.8
of net 1% 3% 1% 5% 7% 3%A 1% 5% 5%A
intere
st
income
to
averag
e net
assets

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D 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.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S
EXPENSES.
F FROM FEBRUARY 3, 1990 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1990.
G YEARS ENDED APRIL 30
H FOR THE PERIOD MAY 1, 1992 TO JANUARY 31, 1993
FIDELITY NY MUNI MONEY MARKET

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

Years ended 1998 1997 1996 1995 1994 1993E 1992D 1991D 1990D 1989D
January 31

Net $ 1 $ 1 $ 1 $ 1 $ 1 $ 1. $ 1 $ 1 $ 1 $ 1
asset .0 .0 .0 .0 .0 000 .0 .0 .0 .0
value, 00 00 00 00 00 00 00 00 00
beginn
ing of
period

Income .031 .029 .033 .024 .018 .017 .034 .046 .052 .049
from
Invest
ment
Operat
ions
Net
intere
st
income

Less (. (. (. (. (. (.0 (. (. (. (.
Distri 03 02 03 02 01 17) 03 04 05 04
bution 1) 9) 3) 4) 8) 4) 6) 2) 9)
s
From
net
intere
st
income

Net $ 1 $ 1 $ 1 $ 1 $ 1 $ 1. $ 1 $ 1 $ 1 $ 1
asset .0 .0 .0 .0 .0 000 .0 .0 .0 .0
value, 00 00 00 00 00 00 00 00 00
end
of
period

Total 3. 2. 3. 2. 1. 1.7 3. 4. 5. 4.
returnB 13 94 32 44 84 2% 46 74 34 99
,C % % % % % % % % %

Net $ 1 $ 880 $ 823 $ 737 $ 608 $ 566 $ 540 $ 541 $ 623 $ 685
assets ,0
, end 83
of
period
(In
millio
ns)

Ratio .61% .61% .62% .60% .62% .62 .64% .61% .61% .5
of %A 1%F
expens
es to
averag
e net
assets

Ratio 3. 2. 3. 2. 1. 2.2 3. 4. 5. 4.
of net 10 89 26 42 83 6%A 39 64 21 91
intere % % % % % % % % %
st
income
to
averag
e net
assets

</TABLE>

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

Years 1998 1997 1996 1995 1994G 1993E 1992D 1991D 1990D 1989D
ended
January
31

Net $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1
asset 2. 2. 1. 3. 2. 2. 1. 1. 1. 1.
value, 29 54 37 05 66 10 75 37 64 16
beginni 0 0 0 0 0 0 0 0 0 0
ng of
period

Income .624 .629 .635 .673 .714 .580 .773 .789 .806 .796
from
Investm
ent
Operati
ons
Net
interes
t
income

Net .670 (. 1. (1 .850 .560 .350 .380 (. .480
realize 24 17 .4 27
d and 6) 7 40 0)
unreal )
ized
gain
(loss)

Total 1. .383 1. (. 1. 1. 1. 1. .536 1.
from 29 81 76 56 14 12 16 27
investm 4 2 7) 4 0 3 9 6
ent
operat
ions

Less (. (. (. (. (. (. (. (. (. (.
Distrib 62 63 64 67 71 58 77 78 80 79
utions 4) 1 )H 2) H 3) 4) 0) 3) 9) 6) 6)
From
net
interes
t
income
From (. (. -- (. (. -- -- -- -- --
net 02 00 21 46
realize 0) 2) H 0) 0)
d gain

In -- -- -- (. -- -- -- -- -- --
excess 03
of net 0)
realiz
ed gain

Total (. (. (. (. (1 (. (. (. (. (.
distrib 64 63 64 91 .1 58 77 78 80 79
utions 4) 3) 2) 3) 74 0) 3) 9) 6) 6)
)

Net $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1
asset 2. 2. 2. 1. 3. 2. 2. 1. 1. 1.
value, 94 29 54 37 05 66 10 75 37 64
end of 0 0 0 0 0 0 0 0 0 0
period

Total 10 3. 16 (5 12 9. 9. 10 4. 11
return B,C .8 22 .2 .7 .7 60 80 .5 62 .8
2% % 9% 8) 0% % % 9% % 1%
%

Net $ 1 $ 401 $ 434 $ 394 $ 491 $ 446 $ 412 $ 386 $ 381 $ 368
assets, ,1
end of 3 4
period
(In
million
s)

Ratio .5 .59% .59% .58% .58% .6 .61% .59% .61% .63%
of 5% F 1% A
expense
s to
average
net
assets

Ratio .55% .59% .5 .58% .58% .6 .61% .59% .61% .63%
of 8% I 1% A
expense
s to
average
net
assets
after
expense
reducti
ons

Ratio 4. 5. 5. 5. 5. 6. 6. 6. 6. 6.
of net 97 15 26 77 45 08 52 81 87 99
interes % % % % % % A % % % %
t
income
to
average
net
assets

Portfolio 43 44% 83% 34% 70% 45 30% 45% 34% 49%
turnover rate % J % A

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D YEARS ENDED APRIL 30
E FOR THE PERIOD MAY 1, 1992 TO JANUARY 31, 1993
F 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.
G 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.
H THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES.
I FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
J THE PORTFOLIO TURNOVER RATE DOES NOT INCLUDE THE ASSETS ACQUIRED IN
THE MERGER.
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
tables below show each fund's performance over past fiscal years
compared to different measures, including a comparative index and a
competitive funds average for the bond fund and a measure of
inflation for the money market funds . Data for the comparative
index for Spartan New York Municipal Income is available only from
June 30, 1993 to the present. The chart on page presents
calendar year performance for the bond fund.
AVERAGE ANNUAL TOTAL RETURNS
Fiscal periods ended P Pa Pa
January 31, 1998 a st st
s 5 10
t ye ye
1 ar ar
y s s/
e Li
a fe
r of
fu
nd

Spartan NY Muni Money Market 3.26 % 2.87 % 3.
33 %
A

NY Muni Money Market 3.13 % 2.73 % 3.49 %

Consumer Price Index 1.57% 2.53% 3.40%

Spartan NY Muni Income 10.82 % 7.15 % 8.07 %

Lehman Bros. NY 4+ Yr. Muni. 11.50% n/a n/a
Bond Index

Lipper NY Muni. Debt Funds 10.09% 6.53% 7.74%
Average

A FROM FEBRUARY 3, 1990 (COMMENCEMENT OF OPERATIONS).
CUMULATIVE TOTAL RETURNS
Fiscal periods ended P Pa Pa
January 31, 1998 a st st
s 5 10
t ye ye
1 ar ar
y s s/
e Li
a fe
r of
fu
nd

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Spartan NY Muni Money Market 3.26 % 15.18 % 29.
97 %
A

NY Muni Money Market 3.13 % 14.42 % 40.88 %

Consumer Price Index 1.57% 13.32% 39.67%

Spartan NY Muni Income 10.82 % 41.25 % 117
.33
%

Lehman Bros. NY 4+ Yr. Muni. 11.50% n/a n/a
Bond Index

Lipper NY Muni. Debt Funds 10.09% 37.36% 111.49%
Average

</TABLE>

A FROM FEBRUARY 3, 1990 (COMMENCEMENT OF OPERATIONS).
If FMR had not reimbursed certain fund expenses during these
periods, yields and total returns would have been lower .

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)
EXPLANATION OF TERMS
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1988 1989 1990 1991 1992 1993 1994 1995 1996
1997
SPARTAN NY MUNI INCOME 11.92% 9.28% 5.09% 13.38% 8.98%
12.90% -8.01% 19.57% 3.80% 9.72%
Lipper NY Muni. Debt Funds Avg. 10.81% 9.32% 5.03% 13.28% 9.61%
12.71% -7.52% 16.73% 14.11% 10.09%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67%
2.54% 3.32% 1.70%
Percentage (%)
Row: 1, Col: 1, Value: 11.91
Row: 2, Col: 1, Value: 9.279999999999999
Row: 3, Col: 1, Value: 5.09
Row: 4, Col: 1, Value: 13.38
Row: 5, Col: 1, Value: 8.98
Row: 6, Col: 1, Value: 12.9
Row: 7, Col: 1, Value: -8.01
Row: 8, Col: 1, Value: 19.57
Row: 9, Col: 1, Value: 3.8
Row: 10, Col: 1, Value: 9.719999999999999
(LARGE SOLID BOX) Spartan NY Muni
Income
TOTAL RETURN is the change in value of an investment 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 fund 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.
LEHMAN BROTHERS NEW YORK 4 PLUS YEAR MUNICIPAL BOND INDEX is a total
return performance benchmark for New York investment-grade municipal
bonds with maturities of at least four years.
Unlike each fund's returns, the total returns of the comparative
index do not include the effect of any brokerage commissions,
transaction fees, or other costs of investing.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. Government.
THE COMPETITIVE FUNDS AVERAGE is the Lipper New York Municipal Debt
Funds Average for Spartan New York Municipal Income Fund. As of
January 31, 1998, the average reflected the performance of 94 mutual
funds with similar investment objectives. This average, published by
Lipper Analytical Services, Inc., excludes the effect of sales
loads.
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.
THE FUNDS IN DETAIL

CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders'
money and invests it toward a specified goal. Spartan New York
Municipal Income Fund is a non-diversified fund of Fidelity New
York Municipal Trust, and Spartan New York Municipal Money Market Fund
and Fidelity New York Municipal Money Market Fund are
non-diversified funds of Fidelity New York Municipal Trust II. Both
trusts are open-end management investment companies. Fidelity New York
Municipal Trust was organized as a Massachusetts business trust on
April 25, 1983. Fidelity New York Municipal Trust II was organized as
a Delaware business trust on June 20, 1991. 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 periodically throughout the year to oversee
the funds' activities, review contractual arrangements with companies
that provide services to the funds, and review the funds'
performance. The trustees serve as trustees for other Fidelity
funds. The majority of trustees are not otherwise affiliated with
Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER 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. 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 223
(solid bullet) Assets in Fidelity mutual
funds: over $ 537 billion
(solid bullet) Number of shareholder
accounts: over 35 million
(solid bullet) Number of investment
analysts and portfolio
managers: over 265
(checkmark)
The funds are managed by FMR, which chooses their investments and
handles their business affairs. FIMM , located in Merrimack,
New Hampshire , has primary responsibility for providing investment
management services for the money market funds. Beginning January
1, 1999, FIMM will have primary responsibility for providing
investment management services for Spartan New York Municipal
Income.
Norman Lind is Vice President and manager of Spartan New York
Municipal Income, which he has managed sinc e October 1993. He also
manages other Fidelity funds. Since joining Fidelity in 1986, Mr. Lind
has worked as an analyst and manager.
Fidelity investment personnel may invest in securities for their
own accounts 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.
UMB Bank, n.a. (UMB) is each fund's transfer agent, and is located
at 1010 Grand Avenue, Kansas City, Missouri. UMB employs Fidelity
Service Company, Inc. (FSC) to perform transfer agent servicing
functions for each fund.
FMR Corp. is the ultimate parent company of FMR and FIMM .
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 a fund's transactions, provided that the fund
receives brokerage services and commission rates comparable to those
of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
MONEY MARKET FUNDS IN GENERAL. The yield of a money market fund will
change daily based on changes in interest rates and market conditions.
Money market funds comply with industry-standard requirements for
the quality, maturity, and diversification of their investments,
which are designed to help maintain a stable $1.00 share price. Of
course, there is no guarantee that a money market fund will be able to
maintain a stable $1.00 share price. It is possible that a major
change in interest rates or a default on a money market fund's
investments could cause its share price (and the value of your
investment) to change.
FIDELITY'S APPROACH TO MONEY MARKET FUNDS. Money market funds earn
income at current money market rates. In managing money market funds,
FMR stresses preservation of capital, liquidity, and income. The
money market fund s will purchase only high-quality
securities that FMR believes present minimal credit risks and will
observe maturity restrictions on securities they buy.
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, including securities structured so that they are
eligible investments for the fund. FMR normally invests at least 65%
of the fund's total assets in state municipal securities , and
normally invests the fund's assets so that at least 80% of the
fund's income distributions is free from federal income tax.
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, including
s ecurities structured so that they are eligible
investments for the fund. FMR normally invests at least 65% of the
fund's total assets in state municipal securities , and
normally invests the fund's assets so that at least 80% of the
fund's income distributions is free from federal income tax.
BOND FUNDS IN GENERAL. The yield and share price of a bond fund change
daily based on changes in interest rates and market conditions, and in
response to other economic, political or financial events. The types
and maturities of the securities a bond fund purchases and the credit
quality of their issuers will impact a bond fund's reaction to these
events.
INTEREST RATE RISK. In general, bond prices rise when interest rates
fall and fall when interest rates rise. Longer-term bonds are usually
more sensitive to interest rate changes. In other words, the longer
the maturity of a bond, the greater the impact a change in interest
rates is likely to have on the bond's price. In addition, short-term
interest rates and long-term interest rates do not necessarily move in
the same amount or in the same direction. A short-term bond tends to
react to changes in short-term interest rates and a long-term bond
tends to react to changes in long-term interest rates.
ISSUER RISK. The price of a bond is affected by the credit quality of
its issuer. Changes in the financial condition of an issuer, changes
in general economic conditions, and changes in specific economic
conditions that affect a particular type of issuer can impact the
credit quality of an issuer. Lower quality bonds generally tend to be
more sensitive to these changes than higher quality bonds.
MUNICIPAL MARKET RISK. Municipal securities are backed by the entity
that issued them and/or other revenue streams. Municipal security
values may be significantly affected by political changes as well as
uncertainties in the municipal market related to taxation or the
rights of municipal securities holders. The credit quality of many
municipal securities is enhanced by insurance guaranteeing the timely
payment of interest and repayment of principal. Due to the relatively
small number of municipal insurers, changes in the financial condition
of an individual municipal insurance provider may affect the municipal
market as a whole.
FIDELITY'S APPROACH TO BOND FUNDS. The total return from a bond
includes both income and price gains or losses. In selecting
investments for a bond fund, FMR considers a bond's expected income
together with its potential for price gains or losses. While income is
the most important component of bond returns over time, a bond fund's
emphasis on income does not mean the fund invests only in the
highest-yielding bonds available, or that it can avoid losses of
principal.
FMR focuses on assembling a portfolio of income-producing bonds that
it believes will provide the best balance between risk and return
within the range of eligible investments for the fund. FMR's
evaluation of a potential investment includes an analysis of the
credit quality of the issuer, its structural features, its current
price compared to FMR's estimate of its long-term value, and any
short-term trading opportunities resulting from market inefficiencies.
In structuring a bond fund, FMR allocates assets among different
market sectors (for example, general obligation bonds of a state or
bonds financing a specific project) and different maturities based on
its view of the relative value of each sector or maturity. The
performance of the fund will depend on how successful FMR is in
pursuing this approach.
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 investment-grade municipal securities under
normal conditions. FMR normally invests the fund's assets so that at
least 80% of the fund's income distributions is free
from federal and New York State and City income taxes.
Although the fund does not maintain an average maturity within a
specified range, 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, 1998, the
fund's dollar-weighted average maturity was approximately 13.4
years.
EACH FUND normally invests in municipal securitie s. FMR may
invest all of each fund's assets in municipal securities issued to
finance private activities. The interest from these securities is a
tax-preference item for purposes of the federal alternative minimum
tax.
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.
The funds differ primarily with respect to the level of income
provided and the stability of their share price. The money market
funds seek to provide income while maintaining a stable share
price. The bond fund seeks to provide a higher level of income by
investing in a broader range of securities. As a result, the bond
fund does not seek to maintain a stable share price. In addition,
since the money market funds concentrate their investments in
New York municipal securities, an investment in the money market
funds may be riskier than an investment in other types of money
market funds.
FMR may use various techniques to hedge a portion of the bond
fund's risks, but there is no guarantee that these strategies will
work as intended. When you sell your shares of the bond fund,
they may be worth more or less than what you paid for them.
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 fund does not expect to invest in state
taxable obligations. However, during periods when FMR believes that
New York municipals that meet fund standards are not available, the
bond fund may temporarily invest more than 20% of its assets in
obligations that are only federally tax-exempt. 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 each fund's investments are contained in a
fund's 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. Fund holdings and recent investment strategies are
detailed 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 generally pays the investor
a fixed, variable, or floating 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 sold at a discount from
their face values.
Debt securities have varying levels of sensitivity to changes in
interest rates and varying degrees of credit quality. In general, bond
prices rise when interest rates fall, and fall when interest rates
rise. Longer-term bonds and zero coupon bonds are generally more
sensitive to interest rate changes.
In addition, bond prices are also affected by the credit quality of
the issuer. Investment-grade debt securities are medium- and
high-quality securities. Some, however, may possess speculative
characteristics, and may be more sensitive to economic changes and to
changes in the financial condition of issuers.
RESTRICTIONS: Spartan New York Municipal Income normally
invests in investment-grade securities, but reserves the right to
invest up to 5% of its assets in below investment-grade securities
(sometimes called "junk bonds"). A security is considered to be
investment-grade if it is rated investment -grade by Moody's
Investors Service (Moody's), Standard & Poors (S&P), Duff & Phelps
Credit Rating Co., or Fitch IBCA, Inc., or is unrated but
judged by FMR to be of equivalent quality. Spartan New York
Municipal Income may not invest in securities judged by FMR to be of
equivalent quality to those rated lower than B by Moody's or S&P.
MONEY MARKET SECURITIES are high- quality, short-term instruments
issued by municipalities, local and state governments , and
other entities. These securities may carry fixed, variable, or
floating interest rates. M oney market securities may be
structured or may employ a trust or similar structure s o
that they are eligible investments for money market funds. If the
structure does not perform as intended, adverse tax or investment
consequences may result.
CREDIT AND LIQUIDITY SUPPORT. Issuers may employ various forms of
credit and liquidity enhancement, including letters of credit,
guarantees, puts and demand features, and insurance, provided by
foreign or domestic entities such as banks and other financial
institutions. These arrangements expose a fund to the credit risk of
the entity providing the credit or liquidity support. Changes in the
credit quality of the provider could affect the value of the security
and a fund's share price. In addition, in the case of foreign
providers of credit or liquidity support, extensive public information
about the provider may not be available, and unfavorable political,
economic, or governmental developments could affect its ability to
honor its commitment.
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 fully or partially backed by the local government, or by
the credit of a private issuer or the current or anticipated revenues
from specific projects or assets. Because many municipal securities
are issued to finance similar types of projects, especially those
relating to education, health care, housing, transportation, and
utilities, the municipal markets can be affected by conditions in
those sectors. In addition, all municipal securities may be affected
by uncertainties regarding their tax status, legislative changes, or
rights of municipal securities holders. A municipal security may be
owned directly or through a participation interest.
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,
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. The value of these securities depends on many
factors, including changes in interest rates, the availability of
information concerning the pool and its structure, the credit
quality of the underlying assets, the market's perception of the
servicer of the pool, and any credit enhancement provided. In
addition, these securities may 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, often making the
security's market value more volatile.
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 another party. In exchange for this benefit, a fund may
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 a 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 a 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.
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 FORWARD PURCHASE OR SALE TRANSACTIONS are trading
practices in which payment and delivery for the security take place at
a later date than is customary for that type of security. The
market value of the security could change during this period.
CASH MANAGEMENT. A fund may invest in money market securities and in a
money market fund available only to funds and accounts managed by FMR
or its affiliates, whose goal is to seek a high level of current
income exempt from federal income tax while maintaining a stable $1.00
share price. A major change in interest rates or a default on the
money market fund's investments could cause its share price to change.
RESTRICTIONS: Spartan New York Municipal Income Fund does not
currently intend to invest in a money market fund.
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 changes in the market value of a
single issuer or industry.
RESTRICTIONS: Each fund is considered non-diversified. Generally, to
meet federal tax requirements at the close of each quarter, each 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 issuer. These limitations do not apply to
U.S. Government securities or to securities of other investment
companies. Each fund may invest more than 25% of its total assets in
tax-free securities that finance similar types of projects.
BORROWING . Each fund may borrow from banks or from other funds
advised by FMR, or through reverse repurchase agreements. If a fund
borrows money, its share price may be subject to greater fluctuation
until the borrowing is paid off. If a fund makes additional
investments while borrowings are outstanding, this may be considered a
form of leverage.
RESTRICTIONS: Each fund may borrow only for temporary or
emergency purposes, but not in an amount exceeding 331/3% 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.
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.
SPARTAN 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 will normally invest
so that at least 80% of its income distributions are exempt from
federal and New York State and City income taxes.
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.
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, but not
in an amount exceeding 331/3% 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 the money market funds.
New York Municipal Money Market and Spartan New York Municipal
Income also pay OTHER EXPENSES, which are explained below.
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 in the case of certain funds may be terminated
at any time without notice, can decrease a fund's expenses and
boost its performance.
MANAGEMENT FEE AND OTHER EXPENSES
Each fund's management fee is calculated and paid to FMR every
month. FMR pays all of the other expenses of Spartan New York
Municipal Money Market with limited exceptions. The annual management
fee rate for Spartan New York Municipal Money Market is 0.50% of its
average net assets. For New York Municipal Money Market and Spartan
New York Municipal Income, the fee is calculated by adding a group fee
rate to an individual fund fee rate, multiplying the result by the
fund's monthly average net assets and dividing by twelve.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.37%, and it
drops as total assets under management increase.
FMR has voluntarily agreed to limit Spartan New York Municipal
Income's total operating expenses to an annual rate of 0.53% of
average net assets. This agreement will continue until December 31,
1999.
For January 1 998, the group fee rate was 0.1370 %. The
individual fund fee rate is 0.25% for New York Municipal Money Market
and Spartan New York Municipal Income.
The total management fee for New York Municipal Money Market
for the fiscal year ended January 31, 1998 was 0.39 % of the
fund's average net assets.
Because of a reimbursement arrangement, the total management fee for
Spartan New York Municipal Income for the fiscal year ended
January 31, 1998 was 0.37 % of the fund's average net
assets.
F IMM is Spartan New York Municipal Money Market's and New York
Municipal Money Market's sub-adviser and has primary responsibility
for managing their investments. FMR is responsible for providing other
management services. FMR pays FIMM 50% of its management fee
(before expense reimbursements) for FIMM's services. FMR paid
FMR Texas Inc., the predecessor company to FIMM, fees equal to
0.25% of Spartan New York Municipal Money Market's and 0.20% of New
York Municipal Money Market's average net assets for the fiscal
year ended January 31, 1998.
Beginning January 1, 1999, FIMM will have primary responsibility
for managing Spartan New York Municipal Income Fund's investments. FMR
will pay FIMM 50% of its management fee (before expense
reimbursements) for FIMM's services.
While the management fee is a significant component of each of New
York Municipal Money Market's and Spartan New York Municipal Income's
annual operating costs, these funds have other expenses as well.
UMB is the transfer and service agent for each fund. UMB has
entered into sub-agreements with FSC under which FSC performs transfer
agency, dividend disbursing, shareholder servicing, and accounting
functions for the funds. These services include processing shareholder
transactions, valuing each fund's investments, and calculating each
fund's share price and dividends.
Under the terms of the sub-agreements, FSC receives all related
fees paid to UMB by New York Municipal Money Market and Spartan New
York Municipal Income and by FMR on behalf of Spartan New York
Municipal Money Market.
For the fiscal year ended January 31, 1998, transfer agency and
pricing and bookkeeping fees paid (as a percentage of average net
assets) amounted to the following. These amounts are before expense
reductions, if any.
Transfe
r
Agency
and
Pricing
and
Bookkee
ping
Fees
Paid by
Fund

NY Muni Money Market 0.19 %

Spartan NY Muni Income 0.15 %

In the case of Spartan New York Municipal Money Market, FMR, not
the fund, pays for these services.
New York Municipal Money Market and Spartan New York Municipal
Income also pay other expenses, such as legal, audit, and custodian
fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity. A
broker-dealer may use a portion of the commissions paid by a fund to
reduce that fund's custodian or transfer agent fees.
Spartan New York Municipal Money Market also pays other expenses,
such as brokerage fees and commissions, interest on borrowings, taxes,
and the compensation of trustees who are not affiliated with
Fidelity.
To offset shareholder service costs, FMR or its affiliates also
collect Spartan New York Municipal Money Market's $5.00 exchange fee,
$5.00 account closeout fee, $5.00 fee for wire purchases and
redemptions, and the $2.00 checkwriting charge.
Each fund has adopted a DISTRIBUTION AND SERVICE PLAN. Each
plan recognizes that FMR may use its management fee revenues,
as well as its past profits or its resources from any other source, to
pay FDC for expenses incurred in connection with the distribution of
fund shares. FMR directly, or through FDC, may make payments to third
parties, such as banks or broker-dealers, that engage in the
sale of, or provide shareholder support services for, the fund's
shares. Currently, the Board of Trustees of each fund has
authorized such payments.
For the fiscal year ended January 31, 1998 the portfolio turnover
rate for the bond fund was 43%. This rate varies 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- advantaged 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 Municipal Money Market as your
core account for your Fidelity Ultra Service Account(registered
trademark) or FidelityPlusSM brokerage account.
You may purchase or sell shares of the funds through an investment
professional, including a broker, who may charge you a transaction fee
for this service. If you invest through FBSI, another financial
institution, or an investment professional, read their program
materials for any special provisions, additional service features or
fees that may apply to your investment in a fund. Certain features of
the fund, such as the minimum initial or subsequent investment
amounts, may be modified.
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
THE PRICE TO BUY ONE SHARE of each fund is the fund's net
asset value per share (NAV). Each money market fund is managed to keep
its NAV stable at $1.00. Each fund's shares are sold without a
sales charge.
Your shares will be purchased at the next NAV calculated after your
investment is received in proper form. Each fund's NAV is normally
calculated each business day at 4:00 p.m. Eastern time, and also at
12:00 noon Eastern time for New York Municipal Money Market.
Each fund reserves the right to reject any specific purchase order,
including certain purchases by exchange. See "Exchange Restrictions"
on page 36. Purchase orders may be refused if in FMR's opinion, they
would disrupt management of a fund.
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
For Spartan N Y Muni Money Market $25,000
For N Y Muni Money Market $5,000
For Spartan NY Muni Income $10,000
TO ADD TO AN ACCOUNT
For Spartan N Y Muni Money Market $1,000
Through regular investment plans* $500
For N Y Muni Money Market $250
Through regular investment plans* $100
For Spartan N Y Muni Income $1,000
Through regular investment plans* $500
MINIMUM BALANCE
For Spartan N Y Muni Money Market $10,000
For N Y Muni Money Market $2,000
For Spartan NY Muni Income $5,000
*FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO
"INVESTOR SERVICES," PAGE .
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 To Add to an
Account Account

Phone 1-800-544-7777
(phone_graphic) (small solid bullet) Exchange (small solid bullet) Exchange
from another from another
Fidelity Fidelity
fund account fund account
with the with the
same same
registration registration
, including , including
name, name,
address, and address, and
taxpayer ID taxpayer ID
number. 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: up to
$100,000.

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

In Person
(hand_graphic) (small solid bullet) Bring your (small solid bullet) Bring your
application check to a
and check Fidelity
to a Fidelit Investor
y Investor Center. Call
Center. Call 1-800-544-97
1-800-544-97 97 for the
97 for the center
center nearest you.
nearest you.

Wire (wire_graphic) (small solid bullet) There may be (small solid bullet) There may be
a $5.00 fee a $5.00 fee
for each for each
wire wire
purchase. purchase.
(small solid bullet) Call 1-800-544-7777
to set up your (small solid bullet) Wire to:
account and to arrange a wire FOR THE BOND FUND:
transaction. Bankers Trust Company,
(small solid bullet) Wire within 24 hours
to: Bank Routing #021001033,
Bankers Trust Company, Account #00163053.
Bank Routing #021001033, FOR THE MONEY MARKET FUND S:
Account #00163053. The Chase Manhattan Bank,
Specify the complete name of the Bank Routing #021000021,
fund and include your new account FFC Fidelity/SAS INST DEP
number and your name. Account #323039502.
Specify the complete name of the
fund and include your account
number and your name.

Automatically
(automatic_graphic) (small solid bullet) Not (small solid bullet) Use Fidelity
available. Automatic
Account
Builder.
Sign up for
this service
when opening
your
account, or
call
1-800-544-66
66 to add
it.

</TABLE>

<TABLE>
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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.
THE PRICE TO SELL ONE SHARE of each fund is the fund's
NAV.
Your shares will be sold at the next NAV calculated after your
order is received in proper form. Each fund's NAV is normally
calculated each business day at 4:00 p.m. Eastern time, and also at
12:00 noon Eastern time f or New York Municipal 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
$10,000 worth of shares in the account for Spartan New York
Municipal Money Market, $2,000 for New York Municipal Money Market and
$5,000 for Spartan New York Municipal Income 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 Special
Type Requirements

For Spartan New York Municipal Money
Market, 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>
<CAPTION>
<S> c> <C>
Phone 1-800-544-777
(phone_graphic) All (small solid bullet) Maximum check
account request:
types $100,000.
(small solid bullet) For Money Line transfers to your bank account;
minimum: $10; maximum: up to $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 (small solid bullet) The letter of
, Joint instruction
Tenant, must be signed
Sole Propr by all persons
ietorship, required to
UGMA, UTMA sign for
Trust transactions,
exactly as
their names
appear on the
Business or Organization account.
(small solid bullet) The trustee must sign the letter indicating
capacity as trustee. If the trustee's name is not
in the account registration, provide a copy of the
trust document certified within the last 60 days.
Executor, Administrator, (small solid bullet) At least one person authorized by corporate
Conservator, Guardian resolution to act on the account must sign the
letter.
(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 (small solid bullet) You must sign
account up for the wire
types 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
in proper form by Fidelity before 4:00 p.m.
Eastern time for money to be wired on the
next business day.

Check
(check_graphic) All (small solid bullet) Minimum check:
account $1,000 for
types Spartan New
York Municipal
Money Market,
$500 for New
York Municipal
Money Market,
and $1,000 for
Spartan New
York Municipal
Income.
(small solid bullet) All account owners must sign a signature card
to receive a checkbook.

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
(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.
24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
RETIREMENT ACCOUNT ASSISTANCE
1-800-544-4774
TOUCHTONE XPRESSSM
1-800-544-5555
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 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, prospectuses, 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. You may pay a
$5.00 fee for each exchange out of Spartan New York Municipal
Money Market , unless you place your transaction through
Fidelity's automated exchange services.
Note that exchanges out of a fund are limited to four per
calendar year (except for New York Municipal 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
$500 FOR
SPARTAN MONTHLY OR QUARTERLY (SMALL SOLID BULLET) FOR A NEW ACCOUNT, COMPLETE THE APPROPRIATE SECTION ON THE FUND
NY MUNI MONEY APPLICATION.
MARKET, $100 FOR (SMALL SOLID BULLET) FOR EXISTING ACCOUNTS, CALL 1-800-544-6666 FOR AN APPLICATION.
NY MUNI MONEY (SMALL SOLID BULLET) TO CHANGE THE AMOUNT OR FREQUENCY OF YOUR INVESTMENT, CALL
MARKET AND $500 1-800-544-6666 AT LEAST THREE BUSINESS DAYS PRIOR TO YOUR NEXT
FOR SPARTAN NY MUNI SCHEDULED INVESTMENT DATE.
INCOME

</TABLE>

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

<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 FOR SPARTAN EVERY PAY PERIOD (SMALL SOLID BULLET) CHECK THE APPROPRIATE BOX ON THE FUND APPLICATION, OR CALL
NY MUNI MONEY 1-800-544-6666 FOR AN AUTHORIZATION FORM.
MARKET, $100 FOR (SMALL SOLID BULLET) CHANGES REQUIRE A NEW AUTHORIZATION FORM.
NY MUNI MONEY
MARKET AND $500
FOR SPARTAN NY MUNI
INCOME

</TABLE>

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

<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY Setting up or changing
$500 for Spartan Monthly, bimonthly, (small solid bullet) To establish, call 1-800-544-6666 after both accounts are
NY Muni Money quarterly, or annually opened.
Market, $100 for (small solid bullet) To change the amount or frequency of your investment, call
NY Muni Money 1-800-544-6666.
Market and $500
for Spartan NY Muni
Income

</TABLE>

A BECAUSE BOND FUND SHARE PRICES FLUCTUATE, THAT FUND MAY NOT BE AN
APPROPRIATE CHOICE 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 fund 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. The bond
fund offers four options, and the money market funds offer three
options.
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. (bond fund only) Your capital gain
distributions, if any, will be automatically reinvested, but you will
be sent a check for each dividend distribution.
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 distributed as dividends and
taxed as ordinary income. C apital 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 a
statement showing the tax status of distributions and will report to
the IRS the amount of any taxable 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.
To the extent that a fund's income dividends are derived from state
tax-free investments, they will be free from New York State and City
personal income taxes. Corporate taxpayers should note that a fund's
income dividends and other distributions are not exempt from New York
State and City franchise or corporate income taxes.
During the fiscal year ended January 31, 1998, 100% of each
fund's income dividends was free from federal income tax, and 100%
was free from New York State and City income taxes for each fund.
39.74 % of Spartan New York Municipal Money Market's, 34.61 %
of New York Municipal Money Market's and 5.88% of Spartan New York
Municipal Income's income 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 when a fund has realized but
not yet distributed income or capital gains, 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. FSC normally c alculates each fund's NAV as of
the close of business of the NYSE, normally 4:00 p.m. Eastern time,
and also at 12:00 noon Eastern time for New York Municipal 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.
Each money market fund's assets are valued on the basis of
amortized cost. This method minimizes the effect of changes in a
security's market value and helps each money market fund to
maintain a stable $1.00 share price.
For the bond fund, assets are valued primarily on the basis of
information furnished by a pricing service or market quotations, if
available, or by another method that the Board of Trustees
believes accurately reflects fair value.
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 OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to 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 .
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be
purchased at the next NAV calculated after your investment is received
in proper form. 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 canceled and you could be liable for any losses or fees a
fund or its transfer agent has incurred.
(small solid bullet) For Spartan New York Municipal Money Market
and Spartan New York Municipal Income, shares begin to earn dividends
on the first business day following the day of purchase.
(small solid bullet) For New York Municipal Money Market, shares
purchased before 12:00 noon Eastern time begin to earn dividends on
the day of purchase. Shares purchased after 12:00 noon begin to earn
dividends on the first business day following the day of purchase.
(small solid bullet) For Spartan New York Municipal Money Market
and Spartan New York Municipal Income, shares earn dividends through
the day of redemption; however, shares redeemed on a Friday or prior
to a holiday continue to earn dividends until the next business
day.
(small solid bullet) For New York Municipal Money Market, shares
redeemed before 12:00 noon Eastern time earn dividends through the
business day prior to the day of redemption. Shares redeemed after
12:00 noon earn dividends through the day of redemption; however,
shares redeemed on a Friday or prior to a holiday continue to earn
dividends until the next 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.
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 order 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) For New York Municipal Money Market, shares
redeemed before 12:00 noon Eastern time do not earn the dividend
declared on the day of redemption. For each of Spartan New York
Municipal Money Market and Spartan New York Municipal Income, 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.
(small solid bullet) If your account is not an Ultra Service Account,
there is a $1.00 charge for each check written under $500.
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 $24.00 per shareholder. It is expected that
accounts will be valued on the second Friday in November of each year.
Accounts opened after September 30 will not be subject to the fee for
that year. The fee, which is payable to the transfer agent, is
designed to offset in part the relatively higher costs of servicing
smaller accounts. This fee will not be deducted from Fidelity
brokerage accounts, retirement accounts (except non-prototype
retirement accounts), accounts using regular investment plans, or if
total assets with Fidelity exceed $30,000. Eligibility for the $30,000
waiver is determined by aggregating Fidelity 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 $10,000 for Spartan New York
Municipal Money Market, $2,000 for New York Municipal Money Market,
and $5,000 for Spartan New York Municipal Income , 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 for Spartan New York
Municipal Money Market, 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.
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
available 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, Spartan New York Municipal Money
Market and Spartan 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 1.00% and trading fees of up to
1.50% of the amount exchanged. Check each fund's prospectus for
details.

This prospectus is printed on recycled paper using soy-based inks.
SPARTAN(registered trademark) NEW YORK MUNICIPAL MONEY MARKET FUND
AND
FIDELITY NEW YORK MUNICIPAL MONEY MARKET FUND
FUNDS OF FIDELITY NEW YORK MUNICIPAL TRUST II
SPARTAN(registered trademark) NEW YORK MUNICIPAL INCOME FUND
A FUND OF FIDELITY NEW YORK MUNICIPAL TRUST
STATEMENT OF ADDITIONAL INFORMATION
MARCH 23 , 1998
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectus
(dated March 23 , 1998 ). Please retain this document for
future reference. The Annual Reports are separate documents supplied
with this SAI. To obtain a free additional copy of the Prospectus or
an Annual Report, please call Fidelity at 1-800-544-8888.
TABLE OF CONTENTS PAGE

Investment Policies and Limitations 27

Special Considerations Regarding New York 32

Special Considerations Regarding Puerto Rico 36

Portfolio Transactions 37

Valuation 38

Performance 39

Additional Purchase, Exchange and Redemption 45
Information

Distributions and Taxes 45

FMR 46

Trustees and Officers 46

Management Contracts 49

Distribution and Service Plans 53

Contracts with FMR Affiliates 53

Description of the Trusts 54

Financial Statements 55

Appendix 55

INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISER
Fidelity Investments Money Management, Inc. (FIMM) (money
market funds)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
UMB Bank, n.a. (UMB)
and Fidelity Service Company, Inc. (FSC)
NYS-ptb-0398
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in
the Prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of a fund's assets that may
be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation
will be determined immediately after and as a result of the fund's
acquisition of such security or other asset. Accordingly, any
subsequent change in values, net assets, or other circumstances will
not be considered when determining whether the investment complies
with the fund's investment policies and limitations.
A fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (1940
Act)) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations
described in this SAI are not fundamental and may be changed
without shareholder approval.
INVESTMENT LIMITATIONS OF SPARTAN NEW YORK MUNICIPAL MONEY MONEY
MARKET FUND
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) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the
fund currently intends to comply with certain diversification limits
imposed by Subchapter M.
(ii) The fund does not currently intend to 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.
(iii) 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 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.
(iv) 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.
(v) 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.
(vi) 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 purpose of limitation (i), Subchapter M generally requires the
fund to invest no more than 25% of its total assets in securities of
any one issuer and to invest at least 50% of its total assets so that
no more than 5% of the fund's total assets are invested in securities
of any one issuer. However, Subchapter M allows unlimited investments
in cash, cash items, government securities (as defined in Subchapter
M) and securities of other investment companies. These tax
requirements are generally applied at the end of each quarter of the
fund's taxable year.
For purposes of limitations (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.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's policies on quality and maturity, see section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF FIDELITY NEW YORK MUNICIPAL MONEY MARKET
FUND
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) 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 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 considered 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, 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.
(11) The fund may, not withstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the
fund currently intends to comply with certain diversification limits
imposed by Subchapter M.
(ii) The fund does not currently intend to 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.
(iii) 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 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.
(iv) 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.
(v) 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.
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, polices, and limitations as the fund.
For purpose of limitation (i), Subchapter M generally requires the
fund to invest no more than 25% of its total assets in securities of
any one issuer and to invest at least 50% of its total assets so that
no more than 5% of the fund's total assets are invested in securities
of any one issuer. However, Subchapter M allows unlimited investments
in cash, cash items, government securities (as defined in Subchapter
M) and securities of other investment companies. These tax
requirements are generally applied at the end of each quarter of the
fund's taxable year.
For purposes of limitations (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.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's policies on quality and maturity, see the section
entitled "Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF SPARTAN NEW YORK MUNICIPAL INCOME FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except 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) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the
fund currently intends to comply with certain diversification limits
imposed by Subchapter M.
(ii) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (2)). 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 engage in repurchase
agreements or make loans, but this limitation does not apply to
purchases of debt securities.
(vii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
with substantially the same fundamental investment objective,
policies, and limitations as the fund.
For purpose of limitation (i), Subchapter M generally requires the
fund to invest no more than 25% of its total assets in securities of
any one issuer and to invest at least 50% of its total assets so that
no more than 5% of the fund's total assets are invested in securities
of any one issuer. However, Subchapter M allows unlimited investments
in cash, cash items, government securities (as defined in Subchapter
M) and securities of other investment companies. These tax
requirements are generally applied at the end of each quarter of the
fund's taxable year.
For purposes of limitations (4), FMR identifies the issuer of a
security depending on its terms and conditions. In identifying the
issuer, FMR will consider the entity or entities responsible for
payment of interest and repayment of principal and the source of such
payments; the way in which assets and revenues of an issuing political
subdivision are separated from those of other political entities; and
whether a governmental body is guaranteeing the security.
With respect to limitation (v), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For t he fund's limitations on futures and options transactions,
see the section entitled "Limitations on Futures and Options
Transactions" on page .
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. FMR may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help the fund achieve
its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These
transactions may involve repurchase agreements with custodian
banks; short-term obligations of, and repurchase agreements with, the
50 largest U.S. banks (measured by deposits); municipal securities;
U.S. Government securities with affiliated financial institutions that
are primary dealers in these securities; short-term currency
transactions; and short-term borrowings. In accordance with exemptive
orders issued by the Securities and Exchange Commission (SEC), the
Board of Trustees has established and periodically reviews procedures
applicable to transactions involving affiliated financial
institutions.
DELAYED-DELIVERY TRANSACTIONS. Securities may be bought and sold
on a delayed-delivery or when-issued basis. These transactions
involve a commitment 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 fund may receive fees or price
concessions for entering into delayed-delivery transactions.
When purchasing securities on a delayed-delivery basis, the
purchaser assumes the rights and risks of ownership, including the
risks of price and yield fluctuations and the risk that the
security will not be issued as anticipated. Because payment for
the securities is not required until the delivery date,
these risks are in addition to the risks associated with a fund's
investments. If a fund remains substantially fully invested at a time
when delayed-delivery purchases are outstanding, the delayed-delivery
purchases may result in a form of leverage. When delayed-delivery
purchases are outstanding, a fund will set aside appropriate liquid
assets in a segregated custodial account to cover the 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, a fund
could miss a favorable price or yield opportunity or suffer a loss.
A fund may renegotiate a delayed delivery transaction and may sell
the underlying securities before delivery, which may result in capital
gains or losses for the fund.
FEDERALLY TAXABLE SECURITIES. Under normal conditions, a municipal
fund does not intend to invest in securities whose interest is
federally taxable. However, from time to time on a temporary basis,
a municipal fund may invest a portion of its assets in
fixed-income securities whose interest is subject to federal
income tax.
Should a municipal fund invest in federally taxable
securities , it would purchase securities that, in FMR's
judgment, are of high quality. These would include securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, obligations of domestic banks, and repurchase
agreements. A municipal bond fund's standards for high-quality,
taxable securities 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.
A municipal money market fund will purchase taxable securities only
if they meet its quality requirements.
Proposals to restrict or eliminate the federal income tax exemption
for interest on municipal securities are introduced before
Congress from time to time. Proposals also may be introduced before
the New York legislature that would affect the state tax
treatment of a municipal fund's distributions. If such
proposals were enacted, the availability of municipal
securities and the value of a municipal fund's holdings
would be affected and the Trustees would reevaluate the fund's
investment objectives and policies.
FUTURES AND OPTIONS. The following paragraphs 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 SEC 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 involve purchasing and writing options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the
overall position. For example, purchasing a put option and
writing a call option on the same underlying instrument
would construct a combined position whose risk and return
characteristics are similar to selling a futures contract. Another
possible combined position would involve writing a call option at one
strike price and buying a call option at a lower price, to reduce the
risk of the written call option in the event of a substantial price
increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to
open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of
types of exchange-traded options and futures contracts, it is
likely that the standardized contracts available will not match a
fund's current or anticipated investments exactly. A fund may
invest in options and futures contracts based on securities with
different issuers, maturities, or other characteristics from the
secu rities in which the fund typically invests, which involves a
risk that the options or futures position will not track the
performance of the fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a
fund's investments well. Options and futures prices are affected by
such factors as current and anticipated short-term interest rates,
changes in volatility of the underlying instrument, and the time
remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result
from differing levels of demand in the options and futures markets and
the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price
fluctuation limits or trading halts. A fund may purchase or sell
options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to
attempt to compensate for differences in volatility between the
contract and the securities, although this may not be successful in
all cases. If price changes in a fund's options or futures positions
are poorly correlated with its other investments, the positions may
fail to produce anticipated gains or result in losses that are not
offset by gains in other investments.
FUTURES CONTRACTS. In purchasing a futures contract, the buyer
agrees to purchase a specified underlying instrument at a specified
future date. In selling a futures contract, the seller agrees
to sell a specified underlying instrument at a specified future
date. The price at which the purchase and sale will take place is
fixed when the buyer and seller enter into the contract. Some
currently available futures contracts are based on specific
securities, such as U.S. Treasury bonds or notes, and some are based
on indices of securities price s, such as the Bond Buyer
Municipal Bond Index. Futures can be held until their delivery dates,
or can be closed out before then if a liquid secondary market is
available.
The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore,
purchasing futures contracts will tend to increase a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a fund sells a futures contract, by contrast, the value
of its futures position will tend to move in a direction contrary to
the market. Selling futures contracts, therefore, will tend to offset
both positive and negative market price changes, much as if the
underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract
is not required to deliver or pay for the underlying instrument unless
the contract is held until the delivery date. However, both the
purchaser and seller are required to deposit "initial margin with a
futures broker, known as a futures commission merchant (FCM), when the
contract is entered into. Initial margin deposits are typically equal
to a percentage of the contract's value. If the value of either
party's position declines, that party will be required to make
additional "variation margin" payments to settle the change in value
on a daily basis. The party that has a gain may be entitled to receive
all or a portion of this amount. Initial and variation margin payments
do not constitute purchasing securities on margin for purposes of a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a fund, the fund may be entitled to
return of margin owed to it only in proportion to the amount received
by the FCM's other customers, potentially resulting in losses to the
fund.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The bond fund has
filed a notice of eligibility for exclusion from the definition of the
term "commodity pool operator" with the Commodity Futures Trading
Commission (CFTC) and the National Futures Association, which regulate
trading in the futures markets. The fund intends to comply with Rule
4.5 under the Commodity Exchange Act, which limits the extent to which
the fund can commit assets to initial margin deposits and option
premiums.
In addition, the bond fund will not: (a) sell futures contracts,
purchase put options, or write call options if, as a result, more than
25% of the fund's total assets would be hedged with futures and
options under normal conditions; (b) purchase futures contracts or
write put options if, as a result, the fund's total obligations upon
settlement or exercise of purchased futures contracts and written put
options would exceed 25% of its total assets; or (c) purchase call
options if, as a result, the current value of option premiums for call
options purchased by the fund would exceed 5% of the fund's total
assets. These limitations do not apply to options attached to or
acquired or traded together with their underlying securities, and do
not apply to securities that incorporate features similar to options.
The above limitations on the bond fund's investments in futures
contracts and options, and the fund's policies regarding futures
contracts and options discussed elsewhere in this SAI, may be changed
as regulatory agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or
futures contract at any particular time. Options may have relatively
low trading volume and liquidity if their strike prices are not close
to the underlying instrument's current price. In addition, exchanges
may establish daily price fluctuation limits for options and futures
contracts, and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days
when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible to enter into new positions or close out
existing positions. If the secondary market for a contract is not
liquid because of price fluctuation limits or otherwise, it could
prevent prompt liquidation of unfavorable positions, and potentially
could require a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a fund's
access to other assets held to cover its options or futures positions
could also be impaired.
OTC OPTIONS. Unlike exchange-traded options, which are standardized
with respect to the underlying instrument, expiration date, contract
size, and strike price, the terms of over-the-counter (OTC) options
(options not traded on exchanges) generally are established through
negotiation with the other party to the option contract. While this
type of arrangement allows the purchaser or writer greater
flexibility to tailor an option to its needs, OTC options generally
involve greater credit risk than exchange-traded options, which are
guaranteed by the clearing organization of the exchanges where they
are traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
purchaser obtains the right (but not the obligation) to sell the
option's underlying instrument at a fixed strike price. In return for
this right, the purchaser pays the current market price for the
option (known as the option premium). Options have various types of
underlying instruments, including specific securities, indices of
securities prices, and futures contracts. The purchaser may
terminate its position in a put option by allowing it to expire or by
exercising the option. If the option is allowed to expire, the
purchaser will lose the entire premium. If the option is
exercised , the purchaser completes the sale of the
underlying instrument at the strike price. A purchaser may also
terminate a put option position by closing it out in the secondary
market at its current price, if a liquid secondary market exists.
The buyer of a typical put option can expect to realize a gain if
security prices fall substantially. However, if the underlying
instrument's price does not fall enough to offset the cost of
purchasing the option, a put buyer can expect to suffer a loss
(limited to the amount of the premium , plus related transaction
costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right
to purchase, rather than sell, the underlying instrument at the
option's strike price. A call buyer typically attempts to participate
in potential price increases of the underlying instrument with risk
limited to the cost of the option if security prices fall. At the same
time, the buyer can expect to suffer a loss if security prices do not
rise sufficiently to offset the cost of the option.
WRITING PUT AND CALL OPTIONS. The writer of a put or call
option takes the opposite side of the transaction from the
option's purchaser. In return for receipt of the premium, the writer
assumes the obligation to pay the strike price for the option's
underlying instrument if the other party to the option chooses to
exercise it. The writer may seek to terminate a position in a
put option before exercise by closing out the option in the secondary
market at its current price. If the secondary market is not liquid for
a put option , however, the writer must continue to be
prepared to pay the strike price while the option is outstanding,
regardless of price changes, and must continue to set aside assets to
cover its position. When writing an option on a futures contract, a
fund will be required to make margin payments to an FCM as described
above for futures contracts.
If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it
is likely that the writer will also profit, because it should be able
to close out the option at a lower price. If security prices fall, the
put writer would expect to suffer a loss. This loss should be less
than the loss from purchasing the underlying instrument directly,
however, because the premium received for writing the option should
mitigate the effects of the decline.
Writing a call option obligates the writer to sell or deliver the
option's underlying instrument, in return for the strike price, upon
exercise of the option. The characteristics of writing call options
are similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall.
Through receipt of the option premium, a call writer mitigates the
effects of a price decline. At the same time, because a call writer
must be prepared to deliver the underlying instrument in return for
the strike price, even if its current value is greater, a call writer
gives up some ability to participate in security price increases.
ILLIQUID 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 funds, FMR may determine some restricted
securities and municipal lease obligations to be illiquid.
For the bond fund, investments currently considered by FMR 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 are
priced at fair value as determined in good faith by a committee
appointed by the Board of Trustees. For the money market funds,
illiquid investments are valued by this method for purposes of
monitoring amortized cost valuation.
INDEXED SECURITIES are instruments whose prices are indexed to
the prices of other securities, securities indices, or other financial
indicators. Indexed securities typically, but not always, are debt
securities or deposits whose value at maturity or coupon rate is
determined by reference to a specific instrument or statistic. Indexed
securities may have principal payments as well as coupon payments that
depend on the performance of one or more interest rates. Their coupon
rates or principal payments may change by several percentage points
for every 1% interest rate change.
The performance of indexed securities depends to a great extent on the
performance of the security or other instrument to which they are
indexed, and may also be influenced by interest rate changes.
Indexed securities may be more volatile than the underlying
instruments . Indexed securities are also subject to
the credit risks associated with the issuer of the security, and their
values may decline substantially if the issuer's creditworthiness
deteriorates.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and
borrow money from, other funds advised by FMR or its affiliates;
however, municipal funds currently intend to participate in
this program only as borrowers . A fund will borrow through the
program only when the costs are equal to or lower than the costs of
bank loans. Interfund borrowings normally extend overnight, but can
have a maximum duration of seven days. Loans may be called on one
day's notice. A fund may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed.
INVERSE FLOATERS have variable interest rates that typically move in
the opposite direction from movements in prevailing short-term
interest rate levels - rising when prevailing short-term interest
rates fall, and vice versa. The prices of inverse floaters can
be considerably more volatile than the prices of bonds with comparable
maturities.
LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities
have poor protection with respect to the payment of interest and
repayment of principal. These securities are often considered to be
speculative and involve greater risk of loss or price changes due to
changes in the issuer's capacity to pay. The market prices of
lower-quality debt securities may fluctuate more than those of
higher-quality debt securities and may decline significantly in
periods of general economic difficulty, which may follow periods of
rising interest rates.
The market for lower-quality debt securities may be thinner and
less active than that for higher-quality debt securities, which can
adversely affect the prices at which the former are sold. If market
quotations are not available, lower-quality debt securities will be
valued in accordance with procedures established by the Board of
Trustees, including the use of outside pricing services. Judgment
plays a greater role in valuing high-yield debt securities than is the
case for securities for which more external sources for quotations and
last-sale information are available. Adverse publicity and changing
investor perceptions may affect the liquidity of lower-quality debt
securities and the ability of outside pricing services to value
lower-quality debt securities.
A fund may choose, at its expense or in conjunction with
others, to pursue litigation or otherwise to exercise its rights as a
security holder to seek to protect the interests of security holders
if it determines this to be in the best interest of the fund's
shareholders.
MONEY MARKET SECURITIES are high-quality, short-term obligations.
Money market securities may be structured or may employ a trust
or other similar structure so that they are eligible investments
for money market funds. For example, put features can be used to
modify the maturity of a security or interest rate adjustment features
can be used to enhance price stability. If 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 LEASES and participation interests therein may take the form
of a lease, an installment purchase, or a conditional sale contract
and are issued by state and local governments and authorities to
acquire land or a wide variety of equipment and facilities. Generally,
a fund will not hold these obligations directly as a lessor of
the property, but will purchase a participation interest in a
municipal obligation from a bank or other third party. A participation
interest gives the purchaser a specified, undivided interest in
the obligation in proportion to its purchased interest in the total
amount of the issue .
Municipal leases frequently have risks distinct from those associated
with general obligation or revenue bonds. State constitutions and
statutes set forth requirements that states or municipalities must
meet to incur debt. These may include voter referenda, interest rate
limits, or public sale requirements. Leases, installment purchases, or
conditional sale contracts (which normally provide for title to the
leased asset to pass to the governmental issuer) have evolved as a
means for governmental issuers to acquire property and equipment
without meeting their constitutional and statutory requirements for
the issuance of debt. Many leases and contracts include
"non-appropriation clauses" providing that the governmental issuer has
no obligation to make future payments under the lease or contract
unless money is appropriated for such purposes by the appropriate
legislative body on a yearly or other periodic basis.
Non-appropriation clauses free the issuer from debt issuance
limitations.
MUNICIPAL MARKET DISRUPTION RISK. The value of municipal
securities may be affected by uncertainties in the municipal market
related to legislation or litigation involving the taxation of
municipal securities or the rights of municipal securities holders in
the event of a bankruptcy. Municipal bankruptcies are relatively rare,
and certain provisions of the U.S. Bankruptcy Code governing such
bankruptcies are unclear and remain untested. Further, the application
of state law to municipal issuers could produce varying results among
the states or among municipal securities issuers within a state. These
legal uncertainties could affect the municipal securities market
generally, certain specific segments of the market, or the relative
credit quality of particular securities. Any of these effects could
have a significant impact on the prices of some or all of the
municipal securities held by a fund, making it more difficult for a
money market fund to maintain a stable net asset value per
share.
ELECTRIC UTILITIES. The electric utilities industry has been
experiencing, and will continue to experience, increased competitive
pressures. Federal legislation in the last two years will open
transmission access to any electricity supplier, although it is not
presently known to what extent competition will evolve. Other risks
include: (a) the availability and cost of fuel, (b) the availability
and cost of capital, (c) the effects of conservation on energy demand,
(d) the effects of rapidly changing environmental, safety, and
licensing requirements, and other federal, state, and local
regulations, (e) timely and sufficient rate increases, and (f)
opposition to nuclear power.
HOUSING. Housing revenue bonds are generally issued by a state,
county, city, local housing authority, or other public agency. They
generally are secured by the revenues derived from mortgages purchased
with the proceeds of the bond issue. It is extremely difficult to
predict the supply of available mortgages to be purchased with the
proceeds of an issue or the future cash flow from the underlying
mortgages. Consequently, there are risks that proceeds will exceed
supply, resulting in early retirement of bonds, or that homeowner
repayments will create an irregular cash flow. Many factors may affect
the financing of multi-family housing projects, including acceptable
completion of construction, proper management, occupancy and rent
levels, economic conditions, and changes to current laws and
regulations.
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.
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 S ONLY). Pursuant to
procedures adopted by the Board of Trustees, the fund s 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 SP-1), and second
tier securities are those deemed to be in the second highest rating
category (e.g., Standard & Poor's SP-2).
Each 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, each fund may look to an
interest rate reset or demand feature.
REFUNDING CONTRACTS. Securities may be purchased on a
when-issued basis in connection with the refinancing of an issuer's
outstanding indebtedness. Refunding contracts require the issuer to
sell and a purchaser to buy refunded municipal obligations at a
stated price and yield on a settlement date that may be several months
or several years in the future. A purchaser generally will not
be obligated to pay the full purchase price if the issuer fails
to perform under a refunding contract. Instead, refunding contracts
generally provide for payment of liquidated damages to the issuer
(currently 15-20% of the purchase price). A purchaser may
secure its obligations under a refunding contract by depositing
collateral or a letter of credit equal to the liquidated damages
provisions of the refunding contract. 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.
As protection against the risk that the original seller will
not fulfill its obligation, the securities are held in a separate
account at a bank, marked-to-market daily, and maintained at a value
at least equal to the sale price plus the accrued incremental amount.
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), the funds will 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 funds anticipate holding restricted
securities to maturity or selling them in an exempt transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. While a reverse
repurchase agreement is outstanding, a fund will maintain
appropriate liquid assets in a segregated custodial account to cover
its obligation under the agreement. The funds will enter into
reverse repurchase agreements with parties whose creditworthiness has
been reviewed and found satisfactory by FMR. Such transactions
may increase fluctuations in the market value of fund assets
and 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 other entity in determining whether to
purchase a security supported by a letter of credit guarantee, put or
demand feature, insurance or other source of credit or liquidity. In
evaluating the credit of a foreign bank or other foreign entities, FMR
will consider whether adequate public information about the entity is
available and whether the entity may be subject to unfavorable
political or economic developments, currency controls, or other
government restrictions that might affect its ability to honor its
commitment.
STANDBY COMMITMENTS are puts that entitle holders to same-day
settlement at an exercise price equal to the amortized cost of the
underlying security plus accrued interest, if any, at the time of
exercise. A fund may acquire standby commitments to enhance the
liquidity of portfolio securities.
Ordinarily a fund will not transfer a standby commitment to a third
party, although it could sell the underlying municipal security to a
third party at any time. A fund may purchase standby commitments
separate from or in conjunction with the purchase of securities
subject to such commitments. In the latter case, the fund would pay a
higher price for the securities acquired, thus reducing their yield to
maturity.
Issuers or financial intermediaries may obtain letters of credit or
other guarantees to support their ability to buy securities on demand.
FMR may rely upon its evaluation of a bank's credit in determining
whether to purchase an instrument supported by a letter of
credit. In evaluating a foreign bank's credit, FMR will consider
whether adequate public information about the bank is available and
whether the bank may be subject to unfavorable political or economic
developments, currency controls, or other governmental restrictions
that might affect the bank's ability to honor its credit commitment.
Standby commitments are subject to certain risks, including the
ability of issuers of standby commitments to pay for securities at the
time the commitments are exercised; the fact that standby commitments
are not generally marketable ; and the possibility that the
maturities of the underlying securities may be different from those of
the commitments.
TENDER OPTION BONDS are created by coupling an intermediate- or
long-term, fixed-rate, municipal bond (generally held pursuant
to a custodial arrangement) with a tender agreement that gives the
holder the option to tender the bond at its face value. As
consideration for providing the tender option, the sponsor (usually a
bank, broker-dealer, or other financial institution) receives periodic
fees equal to the difference between the bond's fixed coupon rate and
the rate (determined by a remarketing or similar agent) that would
cause the bond, coupled with the tender option, to trade at par on the
date of such determination. After payment of the tender option fee, a
fund effectively holds a demand obligation that bears interest at the
prevailing short-term tax-exempt rate. In selecting tender option
bonds, FMR will consider the creditworthiness of the issuer of the
underlying bond, the custodian, and the third party provider of the
tender option. In certain instances, a sponsor may terminate a tender
option if, for example, the issuer of the underlying bond defaults on
interest payments.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments
in the interest rate paid on the security. Variable rate securities
provide for a specified periodic adjustment in the interest rate,
while floating rate securities have interest rates that change
whenever there is a change in a designated benchmark rate. Some
variable or floating rate securities are structured with put
features that permit holders to demand payment of the unpaid
principal balance plus accrued interest from the issuers or certain
financial intermediaries.
In many instances bonds and participation interests have tender
options or demand features that permit the holder to tender (or
put) the bonds to an institution at periodic intervals and to receive
the principal amount thereof. Variable rate instruments
structured in this fashion are considered to be essentially
equivalent to other variable rate securities . The IRS has not
ruled whether the interest on these instruments is tax-exempt.
Fixed-rate bonds that are subject to third party puts and
participation interests in such bonds held by a bank in trust or
otherwise may have similar features.
ZERO COUPON BONDS do not make interest payments; instead,
they are sold at a discount from their face value and are redeemed at
face value when they mature. Because zero coupon bonds do not pay
current income, their prices can be more volatile than other types of
fixed-income securities when interest rates change. In calculating a
fund's dividend, a portion of the difference between a zero coupon
bond's purchase price and its face value is considered income.
SPECIAL CONSIDERATIONS REGARDING NEW YORK
The financial condition of the State of New York ("New York State"
or 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 a Fund, or result in the
default of existing obligations, including obligations which may
be held by the Fund. 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 New York 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. Such information is
subject to change resulting from the issuance of an update to the
Annual Information Statement upon the release of the 1998-99 Executive
Budget. There can be no assurance that such changes may not have
adverse effects on the City's cash flow, expenditures or revenues. It
should be noted that the creditworthiness of obligations issued by
local issuers may be unrelated to the creditworthiness of New York
State, and that there is no obligation on the part of New York State
to make payment on such local obligations in the event of default in
the absence of a specific guarantee or pledge provided by New York
State.
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 such
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 finance, insurance, transportation, communications and
services 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 the finance, insurance and real
estate sector and related business and professional services were
substantially higher (thereby providing a net increase of higher
incomes, taxed at even higher marginal rates).
During the calendar year 1984 through 1991, the State's rate of
economic expansion was somewhat slower than that of the nation as a
whole. In the 1990-1991 national recession, the economy of the
Northeast region in general and the State in particular was more
heavily damaged than that of the rest of the nation and has been
slower to recover.
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 cutbacks in the computer and instrument manufacturing,
utility and defense industries. Personal income increased
substantially in 1992 and 1993. The State's economy entered into a
fourth year of a slow recovery in 1996.
The State Division of the Budget ("DOB") has reported in the Annual
Information Statement dated August 15, 1997 and updated November 5,
1997 ("1997 Annual Information Statement") that the forecast of the
State's economy shows moderate expansion during the first half of
calendar 1997 with the trend continuing through the year. Although
industries that export goods and services are expected to continue to
do well, growth is expected to be moderated by tight fiscal
constraints on the health care and social services industries. On an
average annual basis, employment growth in the State is expected to be
up substantially from the 1996 rate. Personal income is expected to
record moderate gains in 1997 and 1998. Bonus payments in the
securities industry are expected to increase further from 1996 record
level.
The forecast for continued growth, and any resultant impact on the
State's 1997-98 Financial Plan, contains some uncertainties.
Stronger-than-expected gains in employment could lead to a significant
improvement in consumer spending. Investments could also remain
robust. Conversely, hints of accelerating inflation or fears of
excessively rapid economic growth could create upward pressures on
interest rates. In addition, the State economic forecast could over-
or underestimate the level of future bonus payments or inflation
growth, resulting in forecasted average wage growth that could differ
significantly from actual growth. Similarly, the State forecast could
fail to correctly account for declines in banking employment and the
direction of employment change that is likely to accompany
telecommunications and energy deregulation.
There can be no assurance that the State economy will not
experience worse-than-predicted results in FY 1997-98 with
corresponding material and adverse effects on the State's projections
of receipts and disbursements. As all State Financial Plans 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 the 1990-92 national recession
have had a disproportionately adverse impact on the New York City
metropolitan region. According to recent staff reports, while economic
recovery in New York City has been slower than in other regions of the
Country, a surge in Wall Street profitability generated a substantial
surplus for the City in City FY 1996-97. Although several sectors of
the City's economy have expanded recently, especially tourism and
business and professional services, City tax revenues remain heavily
dependent on the continued profitability of the securities industries
and the course of the national economy .
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-Schenectady 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 economics, 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 adopted FY 1997-98 budget projects an increase in General Fund
disbursements of $1.7 billion or 5.2 percent over FY 1996-97 levels.
The average annual growth rate over the last three years is
approximately 1.2 percent. State Funds disbursements (excluding
federal grants) are projected to increase by 5.4 percent from the FY
1996-97. All Governmental Funds projected disbursements increase by
7.0 percent over the FY 1996-97.
The FY 1997-98 State Financial Plan is projected to be balanced on
a cash basis. The Financial Plan projections in the General Fund
include a reserve for future needs of $530 million. As compared to the
Governor's Executive Budget as amended in February, the State's
adopted budget for FY 1997-98 increases General Fund spending by $1.7
billion, primarily from increases for local assistance ($1.3 billion).
Resources used to fund these additional expenditures include increased
revenues projected for the 1997-98 fiscal year, increased resources
produced in the FY 1996-97 that will be utilized in FY 1997-98,
reestimates of social service, fringe benefit and other spending, and
certain non-recurring resources. Total non-recurring resources
included in the FY 1997-98 Financial Plan are projected by DOB to be
$270 million, or 0.7 percent of total General Fund receipts.
This projected surplus is now considered to be at the low end of
the range of possible outcomes for the 1997-98 fiscal year. The
State's economic forecast of national economic activity has not been
modified at this time despite stronger-than-expected national growth
in the first half of the current fiscal year. Growth is projected to
gradually slow for the next few quarters before rebounding somewhat in
the last quarter of 1998.
However, the economic and financial condition of the State may be
affected by various financial, social, economic and political factors.
Those factors can be very complex, can vary from fiscal year to fiscal
year, and are frequently the result of actions taken not only by the
State but also by entities, such as the federal government, that are
outside the State's control. Because of the uncertainty and
unpredictability of changes in these factors, their impact cannot be
fully included in the assumptions underlying the State's
projections.
REVENUE BASE. The State's principal revenue sources are economically
sensitive, and include the personal income tax, user taxes and fees
and business taxes.
The PERSONAL INCOME TAX is imposed on the income of
individuals, estates and trusts and is based on federal definitions of
income and deductions with certain modifications. In 1995, the State
enacted a tax-reduction program designed to reduce receipts from the
personal income tax by 20 percent over three years. Prior to 1995, the
tax had remained substantially unchanged since 1989 as a result of
annual deferrals of tax reductions originally enacted in 1987. The
tax-reduction program is estimated to reduce receipts by $4.0 billion
in FY 1997-98, compared to what tax receipts would have been under the
pre-1995 rate structure. The maximum rate was reduced from the 7.875
percent in effect between 1989 and 1994 to 7.59375 percent for 1995,
to 7.125 percent for 1996, and to 6.85 percent for 1997 and
thereafter. In addition to significant reductions in overall tax
rates, the program also includes increases in the standard deduction,
widening tax brackets to increase the income thresholds to which
higher tax rates apply, and modification of certain tax credits. Net
personal income tax collections are projected to reach $18.87 billion,
over half of all General Fund receipts and $2.5 billion above the
reported 1996-97 fiscal year total. Virtually all of the projected
annual growth in this category, however, is provided by refunds and
refund reserve transactions which affect reported receipts levels in
the 1995-96 through 1997-98 fiscal years. Without these transactions
between years, income tax receipts in 1997-98 would be virtually
flat.
On July 31, 1997, the New York State Tax Appeals Tribunal delivered
a decision involving the computation of itemized deductions and
personal income taxes of certain high income taxpayers. By law, the
State cannot appeal the Tribunal's decision. The decision will lower
income tax liability attributable to such taxpayers for the 1997 and
earlier open tax years, as well as on a prospective basis. The impact
of this decision on receipts estimates for the current and future
fiscal years will be reflected in the Financial Plan and Financial
Plan Update that will accompany the 1998-99 Executive Budget.
USER TAXES AND FEES are comprised of three-quarters of the
State four percent sales and use tax (the balance, one percent, flows
to support Local Government Assistance Corporation ("LGAC") debt
service requirements), cigarette, alcoholic beverage container, and
auto rental taxes, and a portion of the motor fuel excise levies. Also
included in this category are receipts from the motor vehicle
registration fees and alcoholic beverage license fees. Beginning in
1993-94, a portion of the motor fuel tax and motor vehicle
registration fees and all of the highway use tax are earmarked for
dedicated transportation funds. The 1997 Annual Information Statement
states that receipts in this category in the State's FY 1997-98 are
expected to total $7.0 billion, an increase of $204 million from
reported FY 1996-97 results. Underlying growth in the continuing sales
tax base is forecast to be 5 percent, accounting for the increase in
the category as a whole.
BUSINESS TAXES include franchise taxes based generally on
net income of general business, bank and insurance corporations, as
well as gross-receipts-based taxes on utilities and gallonage-based
petroleum business taxes. Through 1993, these levies had been subject
to a 15 percent surcharge initially imposed in 1990. Beginning in
1994, the surcharge rate has been phased out and, for more taxpayers,
there will be no surcharge liability for taxable periods ending in
1997 and thereafter. The 1997 Annual Information Statement states that
total business tax receipts in the State's FY 1997-98 fiscal year are
projected at $4.825 billion, a decline of $253 million from reported
FY 1996-97 results. The decline results primarily from the continuing
effects of tax reductions originally enacted in 1994 and 1995.
On September 11, 1997, the State Comptroller released a report
entitled "The 1997-98 Budget: Fiscal Review and Analysis" in which he
identified several risks to the State Financial Plan and estimated
that the State faces a potential imbalance in receipts and
disbursements of approximately $1.5 billion for the State's 1998-99
fiscal year and approximately $3.4 billion for the State's 1999-00
fiscal year. The 1998-99 fiscal year estimate by the State Comptroller
is within the range discussed by the Division of the Budget in the
section entitled "Outyear Projections of Receipts and Disbursements"
in the Annual Information Statement of August 15, 1997. Any increase
in the 1997-98 reserve for future needs would reduce this imbalance
further and, based upon results to date, such an outcome is considered
possible. In addition, the Comptroller identified risks in future
years from an economic slowdown and from spending and revenue actions
enacted as part of the 1997-98 budget that will add pressure to future
budget balance. The Governor is required to submit a balanced budget
each year to the State Legislature. The Division of the Budget expects
to update the State Financial Plan outyear projections and provide an
update to the Annual Information Statement upon release of the 1998-99
Executive Budget.
STATE DEBT. The State anticipates that its capital programs
will be financed, in part, through borrowings by the State and its
public authorities in FY 1997-98. The State expects to issue $605
million in general obligation bonds (including $140 million for
purposes of redeeming outstanding BANs) and $140 million in general
obligation commercial paper. The Legislature has also authorized the
issuance of $311 million in COPs (including costs of issuance, reserve
funds and other costs) during the State's 1997-98 fiscal year for
equipment purchases. The projection of State borrowings for FY 1997-98
is subject to change as market conditions, interest rates and other
factors vary throughout the fiscal year.
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.
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 in FY
1990-91 created a substantial surplus that was amortized and applied
to offset the State's contribution through FY 1993-94. This change in
actuarial method was ruled unconstitutional by the State's highest
court and the State returned to the aggregate cost method in FY
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. On August 22, 1996, the President signed
into law the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996. This federal legislation fundamentally
changed the programmatic and fiscal responsibilities for
administration of welfare programs at the federal, state and local
levels. The new law abolishes the federal Aid to Families with
Dependent Children program (AFDC), and creates a new Temporary
Assistance to Needy Families with Dependent Children program (AFDC),
and creates a new Temporary Assistance to Needy Families program
(TANF) funded with a fixed federal block grant to states. The new law
also imposes (with certain exceptions) a five-era durational limit on
TANF recipients, requires that virtually all recipients be engaged in
work or community service activities within two years of receiving
benefits, and limits assistance provided to certain immigrants and
other classes of individuals. States are required to meet work
activity participation targets for their TANF caseload; these
requirements are phased in over time. States that fail to meet these
federally mandated job participation rates, or that fail to conform
with certain other federal standards, face potential sanctions in the
form of a reduced federal block grant.
Proposed legislation that includes both provisions necessary to
implement the State's TANF plan to conform with federal law and
implement the Governor's welfare reform proposal is still pending
before the Legislature. There can be no assurances of timely enactment
of certain conforming provisions required under the federal law.
Further delay increases the risk that the State could incur fiscal
penalties for failure to comply with federal law.
MEDICAID. New York 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 that the State 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 1997
Annual Information Statement states that General Fund payments for
Medicaid are projected to be $5.42 billion, virtually unchanged from
the level of $5.38 billion in FY 1996-97. This slow growth in due
primarily to co ntinuation of cost containment measures enacted in
FY 1995-96, new reforms included in the FY 1996-97 adopted budget, and
forecasts for lower caseload based upon actual experience. Other
social service spending is forecast to increase by only $115 million
to $3.15 billion in FY 1997-98.
On August 11, 1997 President Clinton exercised his line item veto
powers to cancel a provision in the Federal Balanced Budget Act of
1997 that would have deemed New York State's health care provider
taxes to be approved by the federal government. New York and several
other states have used hospital rate assessments and other provider
tax mechanisms to finance various Medicaid and health insurance
programs since the early 1980s. The State's process of taxation and
redistribution of health care dollars was sanctioned by federal
legislation in 1987 and 1991. However, the federal Health Care
Financing Administration (HCFA) regulations governing the use of
provider taxes require the State to seek waivers from HCFA that would
grant explicit approval of the provider taxing system now in place.
The State filed the majority of these waivers with HCFA in 1995 but
has yet to receive final approval.
The Balanced Budget Act of 1997 provision passed by Congress was
intended to rectify the uncertainty created by continued inaction on
the State's waiver requests. A federal disallowance of the State's
provider tax system could jeopardize up to $2.6 billion in Medicaid
reimbursement received through December 31, 1998. The President's veto
message valued any potential disallowance at $200 million. The 1997-98
Financial Plan does not anticipate any provider tax disallowance.
On October 9, 1997 the President offered a corrective amendment to
the HCFA regulations governing such taxes. The Governor has stated
that this proposal does not appear to address all of the State's
concerns, and negotiations are ongoing between the State of HCFA. In
addition, the City of New York and other affected parties in the
health care industry have filed a lawsuit challenging the
constitutionality of the President's line item veto.
THE STATE AUTHORITIES. There are numerous public authorities with
various responsibilities, including those which finance, construct
and/or operate revenue producing public facilities. Public authority
operating expenses and debt service costs are generally paid by
revenues generated by the projects financed or operated, such as tolls
charged for the use of highways, bridges or tunnels, rentals charged
for housing units, and charges for occupancy at medical care
facilities. In addition, State legislation authorizes several
financing techniques for public authorities. Also there are statutory
arrangements providing for State local assistance payments otherwise
payable to localities to be made under certain circumstances to public
authorities. Although the State has no obligation to provide
additional assistance to localities whose local assistance payments
have been paid to public authorities under these arrangements, if
local assistance payments are diverted the affected localities could
seek additional State assistance. Some authorities also receive moneys
from State appropriations to pay for the operating costs of certain of
their programs. As described below, the MTA receives the bulk of this
money in order to provide transit and commuter services.
Since 1980, the State has enacted several taxes - including a
surcharge on the profits of banks, insurance corporations and general
business corporations doing business in the 12-county Metropolitan
Transportation Region served by the MTA and a special one-quarter of 1
percent regional sales and use tax - that provide revenues for mass
transit purposes, including assistance to the MTA. Since 1987 State
law has required that the proceeds of a one-quarter of 1 percent
mortgage recording tax paid on certain mortgages in the Metropolitan
Transportation Region be deposited in a special MTA fund for operating
or capital expenses. In 1993, the State dedicated a portion of certain
additional State petroleum business tax receipts to fund operating or
capital assistance to the MTA. For the FY 1996-97, total State
assistance to the MTA is estimated at approximately $1.09 billion.
State legislation accompanying the FY 1996-97 adopted State budget
authorized the MTA, Triborough Bridge and Tunnel Authority and Transit
Authority to issue an aggregate of $6.5 billion in bonds to finance a
portion of a new $11.98 billion MTA capital plan for the 1995 through
1999 calendar years (the "1995-99 Capital Program"), and authorized
the MTA to submit the 1995-99 Capital Program to the Capital Program
Review Board for approval. This plan will supersede the overlapping
portion of the MTA's 1992-96 Capital Program. This is the fourth
capital plan since the Legislature authorized procedures for the
adoption, approval and amendment of MTA capital programs and is
designed to upgrade the performance of the MTA's transportation
systems by investing in new rolling stock, maintaining replacement
schedules for existing assets and bringing the MTA system into a state
of good repair. The 1995-99 Capital Program assumes the issuance of an
estimated $5.1 billion in bonds under this $6.5 billion aggregate
bonding authority. The remainder of the plan is projected to be
financed through assistance from the State, the federal government,
and the City of New York, and from various other revenues generated
from actions taken by the MTA.
There can be no assurance that all the necessary governmental
actions for the 1995-99 Capital Program or future capital programs
will be taken, that funding sources currently identified will not be
decreased or eliminated, or that the 1995-99 Capital Program, or parts
thereof, will not be delayed or reduced. Should funding levels fall
below current projections, the MTA would have to revise its
1995-99 Capital Program accordingly. If the 1995-99 Capital Program is
delayed or reduced, ridership and fare revenues may decline, which
could, among other things, impair the MTA's ability to meet its
operating expenses without additional assistance.
THE CITY. The City has required, and continues to require
significant financial assistance from the State. The City depends on
the State to enable the City to balance its budget and meet its cash
requirements. 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 that
the City assume the local share of public assistance and Medicaid
costs. For each of the 1981 through 1996 fiscal years, the City
achieved balanced operating results as reported in accordance with
then applicable generally accepted accounting principles ("GAAP"). The
City was required to close substantial budget gaps in recent years in
order to maintain balanced operating results. There can be no
assurance that the City will continue to maintain a balanced budget as
required by State law without additional tax or other revenue
increases or additional reductions in City services or entitlement
programs, which could adversely affect the City's economic base.
Pursuant to the New York State Financial Emergency Act for The City
of New York (the "Financial Emergency Act" or the "Act"), the City
prepares a four-year annual financial plan, which is reviewed and
revised on a quarterly basis and which includes the City's capital,
revenue and expense projections and outlines proposed gap-closing
programs for years with projected budget gaps. The City's projections
set forth in the 1997-2000 Financial Plan are based on various
assumptions and contingencies which are uncertain and which may not
materialize. Changes in major assumptions could significantly effect
the City's ability to balance its budget and to meet its annual cash
flow and financing requirements. Such assumptions and contingencies
include the timing and pace of a regional and local economic recovery,
increases in tax revenues, 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, the ability of New York City Health and
Hospitals Corporation and the Board of Education to take actions to
offset reduced revenues, the ability to complete revenue generating
transactions, provision of State and federal aid and mandate relief,
and the impact on City revenues of proposals for federal and State
welfare reform. No assurance can be given that the assumptions used by
the City in the 1997-2000 Financial Plan will be realized. Due to the
uncertainty existing on the federal and state levels, the ultimate
adoption of the State budget for FY 1998-99 may result in substantial
reductions in projected expenditures for social spending programs.
Cost-containment assumptions contained in the 1997-2000 Financial Plan
and the City FY 1998-99 budget may therefore be significantly
adversely affected upon the final adoption of the State budget for FY
1998-99. 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 1997-2000 Financial Plan published on November 14, 1996
reflects actual receipts and expenditures and changes in forecast
revenues and expenditures since the June, 1996 Financial Plan. The
1997-2000 Financial Plan projects revenues and expenditures for FY
1996-97 balanced in accordance with GAAP, and projects gaps of $1.2
billion, $2.1 billion and $3.0 billion for the 1998, 1999 and 2000
fiscal years, respectively.
In connection with the Financial Plan, the City has outlined a
gap-closing program for the 1998 through 2000 fiscal years to
eliminate the remaining $1.2 billion, $2.1 billion and $3.0 billion
projected budget gaps for such fiscal years. This program, which is
not specified in detail, assumes additional agency programs to reduce
expenditures or increase revenues by $400 million, $950 million and
$1.4 billion in the 1998 through 2000 fiscal years, respectively;
additional revenue initiatives and asset sales of $76 million, $229
million and $281 million in the 1998 through 2000 fiscal years,
respectively; additional Federal and State aid of $250 million, $250
million and $325 million in the 1998 through 2000 fiscal years,
respectively; additional reductions in entitlement costs of $400
million, $600 million and $975 million in the 1998 through 2000 fiscal
years, respectively; and availability in each of the 1998 through 2000
fiscal years of $100 million of the General Reserve.
The City's projected budget gaps for the 1999 and 2000 fiscal years
do not reflect the savings expected to result from prior years'
programs to close the gaps set forth in the Financial Plan. Thus, for
example, recurring savings anticipated from the actions which the City
proposes to take to balance the fiscal year 1998 budget are not taken
into account in projecting the budget gaps for the 1999 and 2000
fiscal years.
Although the City has maintained balanced budgets in each of its
last sixteen fiscal years and is projected to achieve balanced
operating results for the 1997 fiscal year, there can be no assurance
that the gap-closing actions proposed in the Financial Plan can be
successfully implemented or that the City will maintain a balanced
budget in future years without additional State aid, revenue increases
or expenditure reductions. Additional tax increases and reductions in
essential City services could adversely affect the City's economic
base.
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 projected that local revenues
would provide approximately 67.8% of total revenues in FY 1996-97
while federal aid, including categorical grants, will provide 11.9% in
FY 1996-97 and State aid, including unrestricted aid and categorical
grants, will provide 20.3% in FY 1996-97. The largest source of the
City's revenues is the real estate tax (approximately 21% of total
revenues projected for FY 1996-97), at rates levied by the City
council (subject to certain State constitutional limits). 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 retail sales 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 four-year 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 such City
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 agency cited specifically the City budget's
reliance on "one-shot" measures to balance the budget for FY 1995-96
without rectifying the underlying structural problems, its continued
optimistic projections of State and federal aid, and continued
high debt levels.
According to the New York City Independent Budget Office forecast
of City Revenues and Expenditures for FY 1998 the City is in
particularly good shape. In addition, to $514 million reserve in a
budget stabilization account, the City is projected to end FY 1998
with a surplus of $120 million. However, in accordance with state law
excess funds cannot be carried over from one year to the next year.
Therefore, all excess funds are used to prepay expenses that would
otherwise be incurred next year; thereby lowering FY 1999 spending
needs.
The City is the largest municipal debt issuer in the nation, and
has more than doubled its debt load since the end of FY 1987-88, in
large measure to rehabilitate its extensive, aging physical plant. The
City's seasonal borrowing needs increased significantly during FY
1989-90 and FY 1990-91, largely due to delayed State aid payments, and
totalled $2.25 billion in FY 1991-92, $1.40 billion in FY 1992-93,
$1.75 billion in FY 1993-94, $2.2 billion in FY 1994-95, $2.4 billion
in FY 1995-96 and $2.4 billion in FY 1996-97.
The City makes substantial capital expenditures to reconstruct and
rehabilitate the City's infrastructure and physical assets, including
City mass transit facilities, sewers, streets, bridges and tunnels,
and to make capital investments that will improve productivity in City
operations. However, when operating revenues come under increasing
pressure, funding levels of the City's capital program are reduced
from those previously forecast in order to reduce debt service costs.
In addition, the City's projection of total debt subject to the
general debt limit that would be required to fund the Updated Ten-Year
Capital Strategy published in April 1995 indicated that, if no action
were taken, projected contracts for capital projects and debt issuance
may exceed the general debt limit by the end of FY 1996-97 and would
exceed the general debt limit by a substantial amount thereafter.
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 FY
1997-98 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. Beginning in 1990,
the City of Troy experienced a series of budgetary deficits that
resulted in the establishment of a Supervisory Board for the City of
Troy in 1994. The Supervisory Board's powers were increased in 1995,
when Troy MAC was created to help Troy avoid default on certain
obligations. The legislation creating Troy MAC prohibits the City of
Troy from seeking federal bankruptcy protection while Troy MAC bonds
are outstanding.
Seventeen municipalities received extraordinary assistance during
the 1996 legislative session through $50 million in special
appropriations targeted for distressed cities.
Municipalities and school districts have engaged in substantial
short-term and long-term borrowings. In 1994, the total indebtedness
of all localities in the State other than New York City was
approximately $17.7 billion. A small portion (approximately $82.9
million) of that indebtedness represented borrowing to finance
budgetary deficits and was issued pursuant to State enabling
legislation. State law requires the Comptroller to review and make
recommendations concerning the budgets of those local government units
other than New York City authorized by State law to issue debt to
finance deficits during the period that such deficit financing is
outstanding. Seventeen localities had outstanding indebtedness for
deficit financing at the close of their fiscal year ending in
1994.
SPECIAL CONSIDERATIONS REGARDING 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, as available on 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 is not aware of any fact which would render such
information materially inaccurate.
The economy of Puerto Rico is fully integrated with that of the
United States, and in fiscal 1996 trade, with the United States
accounted for approximately 88% of Puerto Rico's exports and
approximately 62% of its imports. In this regard, in fiscal 1996
Puerto Rico experienced a $3.2 billion positive adjusted merchandise
trade balance.
Since fiscal 1985 personal income, both aggregate and per capita,
has increased consistently each fiscal year. In fiscal 1996 aggregate
personal income was $29.4 billion ($27.8 billion in 1992 prices) and
personal per capita income was $7,882 ($7,459 in 1992 prices). Gross
domestic product in fiscal 1992 was $23.7 billion and gross product in
fiscal 1996 was $30.2 billion; ($26.7 billion in 1992 prices). This
represents an increase in gross product of 27.7% from fiscal 1992 to
1996 (12.9% in 1992 prices).
Puerto Rico's more than decade-long economy expansion continued
throughout the five-year period from fiscal 1992 through fiscal 1996.
Almost every sector of the economy participated and record levels of
employment were achieved. Factors behind the continued expansion
included government sponsored economic development programs, periodic
declines in the exchange value of the U.S. dollar, the level of
federal transfers and the relatively low cost of borrowing funds
during the period.
Average employment increased from 999,000 in Fiscal 1993, to
1,128,300 in fiscal 1997. Unemployment although at relatively low
historical levels remains above the average for the United States.
Average unemployment decreased from 16.8% in fiscal 1993, to 13.1% in
fiscal 1997.
Manufacturing is the largest sector in the economy accounting for
$18.9 billion or 41.4% of gross domestic product in fiscal 1996. The
manufacturing sector employed 152,489 workers as of March 1997.
Manufacturing has experienced a basic change over the years as a
result of the influx of higher wage, high technology industries such
as the pharmaceutical industry, electronics, computers,
microprocessors, scientific instruments and high technology machinery.
The service sector, which includes wholesale and retail trade and
finance, insurance, and real estate, hotels and related services and
other services, ranks second in its contribution to gross domestic
product and is the sector that employs the greatest number of people.
In fiscal 1996, the serv ice sector generated $17.1 billion in gross
domestic product or 37.6% of the total. Employment in this sector grew
from 449,000 in fiscal 1992 to 527,000 in fiscal 1996, a cumulative
increase of 17.4%, which increase was greater than the 11.9%
cumulative growth in employment over the same period, providing 48% of
total employment. The government sector of the Commonwealth plays an
important role in the economy of the island. In fiscal year 1996 the
government accounted for $4.6 billion or 10.7% of Puerto Rico's gross
domestic product and provided 22.5% of the total employment. Tourism
also contributes significantly to the island economy, accounting for
$1.9 billion of gross domestic product in fiscal 1996.
The present administration has developed and is implementing a new
economic development program which is based on the premise that the
private sector should provide the primary impetus for economic
development and growth. This new program, which is referred to as the
New Economic Model, promotes changing the role of the government from
one of being a provider of most basic services to that of a
facilitator for private sector initiatives and encourages private
sector investment by reducing government-imposed regulatory
restraints.
The New Economic Model contemplates the development of initiatives
that will foster private investment in, and private management of,
sectors that are served more efficiently and effectively by the
private enterprise. One of these initiatives has been the adoption of
a new tax code intended to expand the tax base, reduce top personal
and corporate tax rates, and simplify the tax system. Another
initiative consists of improving and expanding Puerto Rico's
infrastructure to facilitate private sector development and growth,
such as the construction of the water pipeline and cogeneration
facilities described below and the construction of a light rail system
for the San Juan metropolitan area.
The New Economic Model also seeks to identify and promote areas in
which Puerto Rico can compete more effectively in the global markets.
Tourism has been identified as one such area because of its potential
for job creation and contribution to the gross product. In 1993, a new
Tourism Incentives Act and a Tourism Development Fund were implemented
in order to provide special tax incentives and financing for the
development of new hotel projects and the tourism industry. As a
result of these initiatives, new hotels have been constructed or are
under construction which have increased the number of hotel rooms on
the island from 8,415 in fiscal 1992 to 10,877 at the end of fiscal
1997 and to a projected 11,972 by the end of fiscal 1998.
The New Economic Model also seeks to reduce the size of the
government's direct contribution to gross domestic product. As part of
this goal the government has transferred certain governmental
operations and sold a number of its assets to private parties. Among
these are: (i) the sale of the assets of the Puerto Rico Maritime
Authority; (ii) the execution of a five-year management agreement for
the operation and management of the Aqueducts and Sewer Authority by a
private company; (iii) the execution by the Aqueducts and Sewer
Authority of a construction and operating agreement with a private
consortium for the design, construction, and operation of an
approximately 75 million gallon per day water pipeline to the San Juan
metropolitan area from the Dos Bocas reservoir in Utuado; and (iv) the
execution by the Electric Power Authority of power purchase contracts
with private power producers under which two cogen eration plants
(with a total capacity of 800 megawatts) will be constructed; (v) the
Corrections Administration entered into operating agreements with two
private companies for the operation of three new correctional
facilities; (vi) the Government entered into a definitive agreement to
sell certain assets of a pineapple juice processing business and sold
certain mango growing operations; (vii) the Government is in the
process of transferring to local sugar cane growers certain sugar
processing facilities; (viii) the Government sold two hotel properties
and is currently negotiating the sale of a complex consisting of two
hotels and a convention center; (ix) the Government has announced its
intention to sell the Puerto Rico Telephone Company and is currently
involved in the sale process.
One of the goals of the Rossello administration is to change Puerto
Rico's public health care system from one in which the government
provides free health services to low income individuals through public
health facilities owned and administered by the government to one in
which all medical services are provided by the private sector and the
government provides comprehensive health insurance coverage for
qualifying (generally low income) Puerto Rico residents. Under this
new system, the Government selects, through a bidding system, one
private health insurance company in each of several designated regions
of the island and pays such insurance company the insurance premium
for each eligible beneficiary within such region. This new health
insurance system is now covering 61 municipalities out of a total of
78 on the island. It is expected that 11 municipalities will be added
by the end of fiscal 1998 and 5 more by the end of fiscal 1999. The
total cost of this program will depend on the number of municipalities
included in the program, the number of participants receiving
coverage, and the date coverage commences. As of June 30, 1997, over
1,090,592 persons were participating in the program at an estimated
annual cost to Puerto Rico for fiscal 1997 of approximately $521
million. In conjunction with this program, the operation of certain
public health facilities has been transferred to private entities. The
Government's current privatization plan for health facilities provides
for the transfer of ownership of all health facilities to private
entities. The Government has announced that it has selected various
private companies with which it is commencing negotiations expected to
culminate in the sale of ten health facilities to such companies.
One of the factors assisting the development of the manufacturing
sector in Puerto Rico has been the federal and Common wealth tax
incentives available, particularly those under the Puerto Rico
Industrial Incentives Program and Sections 30A and 936 of the Internal
Revenue Code, as amended (the "Code").
The Industrial Incentives Program, through the 1987 Industrial
Incentive Act (the "1987 Act"), grants corporations engaged in
certain qualified activities a fixed 90% exemption from Commonwealth
income and property taxes and a 60% exemption form municipal
license taxes during a 10, 15, 20, or 25 year period depending on
location. The 1987 Act also provides a special deduction equal to 15%
of the production payroll for companies whose net income from
operation is less than $30,000 per production employee and fully
exempts from income, property and local taxes the income from certain
qualified investments in Puerto Rico ("passive income") companies
which make qualified investments for fixed periods of not less than 5
years are eligible to reduce the withholding tax (also known as the
"tollgate tax") imposed on dividend and liquidating distributions from
a maximum of 10% to a minimum rate of 5%, depending on the amount and
term of these investments. In 1993, the 1987 Act was amended to
require the prepayment of a portion of the tollgate tax payable on
distributions in an amount equal to 5% of the company's annual income
after the payment of income taxes. Additionally, companies were
granted the option to pay an up front flat tax of 14% on annual net
income and repatriate profits free of tollgate taxes.
On August 25, 1997 a bill providing for a new industrial incentives
law was introduced in the Puerto Rico Legislature (the "1998 Tax
Incentives Bill"). The benefits provided by the 1998 Tax Incentives
Bill would be available to new companies as well as companies
currently conducting tax exempt operations in Puerto Rico which choose
to renegotiate their existing tax exemption grant. For companies
qualifying thereunder, the 1998 Tax Incentives Bill would impose
income tax rates ranging from 2% to 7%. In addition, it would grant
90% exemption from property taxes, 100% exemption form municipal
license taxes during the first eighteen months of operation and
between 80% and 60% thereafter, and 100% exemption from municipal
excise taxes. The 1998 Tax Incentives Bill also provides various
special deductions designated to stimulate employment and
productivity, research and development and capital investment in
Puerto Rico. Under the 1998 Tax Incentives Bill, companies would be
able to repatriate or distribute their profits free of tollgate taxes.
In addition, passive income derived from designated investments would
continue to be fully exempt from income and municipal license taxes.
Individual shareholders of an exempted business would be allowed a
credit against their Puerto Rico income taxes equal to 30% of their
proportionate share in the exempted business' income tax liability.
Gain from the sale or exchange of shares of an exempted business by
its shareholders during the exemption period would be subject to a 4%
income tax rate.
For many years, U.S. companies operating in Puerto Rico enjoyed a
special tax credit that was available under Section 936 of the Code.
Originally, the credit provided an effective 100% federal tax
exemption for operating and qualifying investment income from Puerto
Rico sources. Amendments to Section 936 made in 1993 (the "1993
Amendments") instituted two alternative methods for calculating the
tax credit and limited the amount of the credit that a qualifying
company could claim. These limitations are based on a percentage of
qualifying income (the "percentage of income limitation") and on
qualifying expenditures on wages and other wage related benefits (the
"economic activity limitation", also known as the "wage credit
limitation"). As a result of amendments incorporated in the Small
Business Job Protection Act of 1996 enacted by the United States
Congress and signed into law by President Clinton on August 20, 1996
(the "1996 Amendments"), as described below the tax credit is now
being phased out over a ten-year period for existing claimants and is
no longer available for corporations that establish operations in
Puerto Rico after October 13, 1995 (including existing Section 936
Corporations (as defined below) to the extent substantially new
operations are established in Puerto Rico). The 1996 Amendments also
moved the credit based on the economic activity limitation to Section
30A of the Code and phased it out over 10 years. In addition, the 1996
Amendments eliminated the credit previously available for income
derived from certain qualified investments in Puerto Rico. The Section
30A Credit and the remaining Section 936 credit are discussed below.
SECTION 30A. The 1996 Amendments added a new Section 30A to the Code.
Section 30A permits a "qualifying domestic corporation" ("QDC") that
meets certain gross income tests (which are similar to the 80% and 75%
gross income tests of Section 936 of the Code discussed below) to
claim a credit (the "Section 30A Credit") against the federal income
tax imposed on taxable income derived from sources outside the United
States from the active conduct of a trade or business in Puerto Rico
or from the sale of substantially all the assets used in such business
("possession income").
A QDC is a United States corporation which (i) was actively conducting
a trade or business in Puerto Rico on October 13, 1995, (ii) had a
Section 936 election in effect for its taxable year that included
October 13, 1995, (iii) does not have in effect an election to use the
percentage limitation of Section 936(a)(4)(B) of the Code, and (iv)
does not add a "substantial new line of business."
The Section 30A Credit is limited to the sum of (i) 60% of qualified
possession wages as defined in the Code, which includes wages up to
85% of the maximum earnings subject to the OASDI portion of Social
Security taxes plus an allowance for fringe benefits of 15% of
qualified possession wages, (ii) a specified percentage of
depreciation deductions ranging between 15% and 65%, based on the
class life of tangible property, and (iii) a portion of Puerto Rico
income taxes paid by the QDC, up to a 9% effective tax rate (but only
if the QDC does not elect the profit-split method for allocating
income from intangible property).
A QDC electing Section 30A of the code may compute the amount of its
active business income, eligible for the Section 30A Credit, by using
either the cost sharing formula, the profit-split formula, or the
cost-plus formula, under the same rules and guidelines prescribed for
such formulas as provided under Section 936 (see discussion below). To
be eligible for the first two formulas, the QDC must have a
significant presence in Puerto Rico.
In the case of taxable years beginning after December 31, 2001, the
amount of possession income that would qualify for the Section 30A
Credit would be subject to a cap based on the QDC's possession income
for an average adjusted base period ending before October 14, 1995.
Section 30A applies only to taxable years beginning after December 31,
1995 and before January 1, 2006.
SECTION 936. Under Section 936 of the Code, as amended by the 1996
Amendments, and as an alternative to the Section 30A Credit, United
States corporations that meet certain requirements and elect its
application ("Section 936 Corporations") are entitled to credit
against their United States corporate income tax, the portion of such
tax attributable to income derived from the active conduct of a trade
or business within Puerto Rico ("active business income") and from the
sale or exchange of substantially all assets used in the active
conduct of such trade or business. To qualify under Section 936 in any
given taxable year, a corporation must derive for the three-year
period immediately preceding the end of such taxable year, (i) 80% or
more of its gross income from sources within Puerto Rico, and (ii) 75%
or more of its gross income from the active conduct of a trade or
business in Puerto Rico.
Under Section 936, a Section 936 Corporation may elect to compute its
active business income, eligible for the Section 936 credit, under one
of three formulas: (A) a cost-sharing formula, whereby it is allowed
to claim all profits attributable to manufacturing intangibles, and
other functions carried out in Puerto Rico, provided it contributes to
the research and development expenses of its affiliated group or pays
certain royalties; (B) a profit-split formula, whereby it is allowed
to claim 50% of the net income of its affiliated group from the sale
of products manufactured in Puerto Rico; or (C) a cost-plus formula,
whereby it is allowed to claim a reasonable profit on the
manufacturing costs incurred in Puerto Rico. To be eligible for the
first two formulas, the Section 936 Corporation must have a
significant business presence in Puerto Rico for purposes of the
Section 936 rules.
As a result of the 1993 Amendments and the 1996 Amendments, the
Section 936 credit is only available to companies that elect the
percentage of income limitation and is limited in amount to 40% of the
credit allowable prior to the 1993 Amendments, subject to a five-year
phase-in period from 1994 to 1998 during which period the percentage
of the allowable credit is reduced from 60% to 40%.
In the case of taxable years beginning on or after 1998, the
possession income subject to the 936 credit will be subject to a cap
based on the Section 936 Corporation's possession income for an
average adjusted base period ending on October 14, 1995. The 936
credit is eliminated for taxable years beginning in 2006.
PROPOSAL TO EXTEND THE PHASEOUT OF SECTION 30A. During 1997, the
Government proposed to Congress the enactment of a new permanent
federal incentive program similar to what is now provided under
Section 30A. Such program would provide U.S. companies a tax credit
based on qualifying wages paid and other wage related expenses, such
as fringe benefits, as well as depreciation expenses for certain
tangible assets and research and development expenses. Under the
Governor's proposal, the credit granted to qualifying companies would
continue in effect until Puerto Rico shows, among other things,
substantial economic improvements in terms of certain economic
parameters. The fiscal 1998 budget submitted by President Clinton to
Congress in February 1997 included a proposal to modify Section 30A to
(i) extend the availability of the Section 30A Credit indefinitely;
(ii) make it available to companies establishing operations in Puerto
Rico after October 13, 1995; and (iii) eliminate the income cap.
President Clinton's proposal, however, was not included in the fiscal
1998 federal budget. While the Government of Puerto Rico plans to
continue lobbying for this proposal, it is not possible at this time
to predict whether the Section 30A Credit will be so modified.
OUTLOOK. It is not possible at this time to determine the long-term
effect on the Puerto Rico economy of the enactment of the 1996
Amendments. The Government of Puerto Rico does not believe there will
be short-term or medium-term material adver se effects on Puerto
Rico's economy as a result of the enactment of the 1996 Amendments.
The Government of Puerto Rico further believes that during the
phase-out period sufficient time exists to implement additional
incentive programs to safeguard Puerto Rico's competitive position.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed
on behalf of each fund by FMR pursuant to authority contained in the
fund's management contract. In the case of the money market
funds , 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 funds 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 funds are
placed with broker-dealer s (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
National Financial Services Corporation (NFSC), an indirect subsidiary
of FMR Corp., if the commissions are fair, reasonable, and comparable
to commissions charged by non- affiliated, qualified brokerage
firms for similar services.
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 NFSC 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 periods ended January 31, 1998 and 1997, the
portfolio turnover rates were 43% and 44%, respectively for Spartan
New York Municipal Income.
For the fiscal years ended January 31, 1998 , 1997, and 1996,
the funds paid no brokerage commissions .
During the fiscal year ended January 31, 1998 , the fund s
paid no fees to brokerage firms that provided research services.
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
For New York Municipal Money Market, FSC normally determines
the fund's NAV at 12:00 p.m. and 4:00 p.m. Eastern time. For
Spartan New York Municipal Money Market and Spartan New York Municipal
Income , FSC normally determines each fund's NAV as of the
close of the NYSE (normally 4:00 p.m. Eastern time). The valuation of
portfolio securities is determined as of these times for the purpose
of computing each fund's NAV.
TAX-FREE BOND FUND. Portfolio securities are valued by various
methods. If quotations are not available, fixed-income securities are
usually valued on the basis of information furnished by a pricing
service that uses a valuation matrix which incorporates both
dealer-supplied valuations and electronic data processing techniques.
Use of pricing services has been approved by the Board of Trustees. A
number of pricing services are available, and the fund may use
various pricing services or discontinue the use of any pricing
service.
Futures contracts and options are valued on the basis of market
quotations, if available.
Securities and other assets for which there is no readily available
market value are valued in good faith by a committee appointed by the
Board of Trustees. The procedures set forth above need not be used to
determine the value of the securities owned by the fund if, in
the opinion of a committee appointed by the Board of Trustees, some
other method would more accurately reflect the fair market value of
such securities.
MONEY MARKET FUNDS . Portfolio securities and other assets are
valued on the basis of amortized cost. This technique involves
initially valuing an instrument at its cost as adjusted for
amortization of premium or accretion of discount rather than its
current market value. The amortized cost value of an instrument may be
higher or lower than the price a fund would receive if it sold
the instrument.
Securities of other open-end investment companies are valued at
their respective NAVs.
During periods of declining interest rates, a fund's yield
based on amortized cost valuation may be higher than would result if
the fund used market valuations to determine its NAV. The converse
would apply during periods of rising interest rates.
Valuing each fund's investments on the basis of amortized cost
and use of the term "money market fund" are permitted pursuant to Rule
2a-7 under the 1940 Act. Each fund must adhere to certain
conditions under Rule 2a-7, as summarized in the section entitled
"Quality and Maturity" on page 40.
The Board of Trustees oversees FMR's adherence to the provisions of
Rule 2a-7 and has established procedures designed to stabilize each
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 a fund's amortized cost per share
may result in material dilution or other unfair results to
shareholders, the Trustees have agreed to take such corrective action,
if any, as they deem appropriate to eliminate or reduce, to the extent
reasonably practicable, the dilution or unfair results. Such
corrective action could include selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten average
portfolio maturity; withholding dividends; redeeming shares in kind;
establishing NAV by using available market quotations; and such other
measures as the Trustees may deem appropriate.
PERFORMANCE
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 a 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 funds 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 funds may quote yields in advertising
based on any historical seven-day period. Yields for the money market
funds are calculated on the same basis as other money market
funds, as required by regulation.
For the bond fund, yields are computed by dividing the 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
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
fund's yield differs from income as determined for other accounting
purposes. Because of the different accounting methods used, and
because of the compounding of income assumed in yield calculations,
the 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 combined federal
and state and city income tax rate. If only a portion of a fund's
yield is tax-exempt, only that portion is adjusted in t he
calculation.
The following tables show the effect of a shareholder's tax status on
effective yield under federal and state income tax laws for
1998 . 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 2% to 7% . 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, state, and city taxes for 1998 .
1998 TAX RATES

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Taxable Income* Feder New New Combi Combi
al York York ned ned
Margi State City Feder Feder
nal Margi Margi al al,
Rate nal nal and State
Rate Rate State , and
Local
Effec Effec
tive tive
Rate Rate*
*

Single Joint Return
Return

$ 25,351-$ 50,000 $ 45,001-$ 90,000 28.00 % 6.85 % 4.40 % 32.93 % 36.10 %

$ 50,001-$ 61,400 $ 90,001-$ 102,300 28.00 % 6.85 % 4.46 % 32.93 % 36.14 %

$ 61,401-$ 128,100 $ 102,301-$ 155,950 31.00% 6.85% 4.46% 35.73% 38.80%

$ 128,101-$ 278,450 $ 155,951-$ 278,450 36.00% 6.85% 4.46% 40.38% 43.24%

$ 278,451 + $ 278,451 + 39.60% 6.85% 4.46% 43.74% 46.43%

</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 - 1998

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
If your combined federal, state, and local
effective tax rate in 1998 is:
36.10% 36.14% 38.80% 43.24% 46.43%

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

2.00% 3.13% 3.13% 3.27% 3.52% 3.73%

3.00% 4.69% 4.70% 4.90% 5.29% 5.60%

4.00% 6.26% 6.26% 6.54% 7.05% 7.47%

5.00% 7.82% 7.83% 8.17% 8.81% 9.33%

6.00% 9.39% 9.40% 9.80% 10.57% 11.20%

7.00% 10.95% 10.96% 11.44% 12.33% 13.07%

</TABLE>

NEW YORK RESIDENTS (OUTSIDE NEW YORK CITY) -DOUBLE TAXES - 1998

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
If your combined federal, state, and local
effective tax rate in 1998 is:

32.93% 35.73% 40.38% 43.74%

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

2.00% 2.98% 3.11% 3.35% 3.55%

3.00% 4.47% 4.67% 5.03% 5.33%

4.00% 5.96% 6.22% 6.71% 7.11%

5.00% 7.46% 7.78% 8.39% 8.89%

6.00% 8.95% 9.34% 10.06% 10.66%

7.00% 10.44% 10.89% 11.74% 12.44%

</TABLE>

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 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. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or
similar illustration, and, for Spartan Municipal Money Market, may
omit or include the effect of the $5.0 0 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
funds' 7-day yields, the bond fund's 30-day yields, each fund's
tax-equivalent yields, and total returns for periods ended January
31 , 1998 .
The tax-equivalent yield is based on a combined effective federal and
state and city income tax rate of 43.24 % and reflects
that, as of January 31 , 1998 , none of the funds '
income was subject to state taxes. Note that each fund may invest in
securities whose income is subject to the federal alternative minimum
tax.
Average Annual Cumulative Total
Total Returns Returns

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Seven Tax- One Five Life One Five Life
-Day Equiv Year Years of Year Years of
Yield alent Fund* Fund*
Yield

Spartan 3.10% 5.46% 3.26% 2.87% 3.33% 3.26% 15.18% 29.97%
NY Muni
Money
Market

</TABLE>

* From Commencement of Operations (February 3, 1990)
Average Annual Cumulative Total
Total Returns Returns

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Seven Tax- One Five Ten One Five Ten
-Day Equiv Year Years Years Year Years Years
Yield alent
Yield

NY Muni 2.98% 5.25% 3.13% 2.73% 3.49% 3.13% 14.42% 40.88%
Money
Market

</TABLE>

Average Annual Cumulative Total
Total Returns Returns

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thirt Tax- One Five Ten One Five Ten
y-Day Equiv Year Years Years Year Years Years
Yield alent
Yield

Spartan 4.21% 7.42% 10.82% 7.15 % 8.07 % 10.82 % 41.25 % 117.3
NY 3 %
Muni
Income

</TABLE>

Note: If FMR had not reimbursed certain fund expenses during these
periods, the fund's yield and total returns would have been
lower.
The following tables show the income and capital elements of each
fund's cumulative total return. The tables compare each fund's return
to the record of the Standard & Poor's 500 Index (S&P 500), the Dow
Jones Industrial Average (DJIA), and the cost of living, as
measured by the Consumer Price Index (CPI), over the same period. The
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 unmanaged index of common stocks and a narrower set of
stocks of major industrial companies, respectively, over the same
period. Because each fund invests in fixed-income securities, common
stocks represent a different type of investment from the funds. Common
stocks generally offer greater growth potential than the funds, but
generally experience greater price volatility, which means greater
potential for loss. In addition, common stocks generally provide lower
income than fixed-income investments such as the funds. The S&P
500 and DJIA returns are based on the prices of unmanaged groups of
stocks and, unlike each fund's returns, do not include the effect of
brokerage commissions or other costs of investing.
The following tables show the growth in value of a hypothetical
$10,000 investment in each fund during the 10-year period ended
January 31, 1998 or life of fund , as applicable , assuming all
distributions were reinvested. The figures below reflect the
fluctuating interest rates and bond prices of the specified periods
and should not be considered representative of the dividend income or
capital gain or loss that could be realized from an investment in a
fund today. Tax consequences of different investments have not been
factored into the figures below.
During the period from February 3, 1990 (commencement of
operations) to January 31, 1998, a hypothetical $10,000 investment in
Spartan New York Municipal Money Market would have grown to
$ 12,997 .
SPARTAN NEW YORK MUNICIPAL MONEY INDICES
MARKET FUND

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year Value Value Value Total S&P 500 DJIA Cost
Ended of of of Value of
Januar Initia Reinve Reinve Living
y 31 l sted sted **
$10,00 Divide Capita
0 nd l Gain
Invest Distri Distri
ment bution bution
s s

1998 $ 10,000 $ 2,997 $ 0 $ 12,997 $ 36,879 $ 37,780 $ 12,684

1997 $ 10,000 $ 2,587 $ 0 $ 12,587 $ 29,060 $ 31,987 $ 12,488

1996 $ 10,000 $ 2,212 $ 0 $ 12,212 $ 23,001 $ 24,802 $ 12,119

1995 $ 10,000 $ 1,804 $ 0 $ 11,804 $ 16,587 $ 17,254 $ 11,797

1994 $ 10,000 $ 1,509 $ 0 $ 11,509 $ 16,500 $ 17,379 $ 11,476

1993 $ 10,000 $ 1,284 $ 0 $ 11,284 $ 14,618 $ 14,058 $ 11,193

1992 $ 10,000 $ 999 $ 0 $ 10,999 $ 13,217 $ 13,291 $ 10,840

1991* $ 10,000 $ 562 $ 0 $ 10,562 $ 10,771 $ 10,923 $ 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 in Spartan
New York Municipal Money Market on February 3, 1990, the net amount
invested in fund shares was $10,000. The cost of 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 $12,997 . 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 $2,626 for
dividends. The fund did not distribute any capital gains during the
period. The figures in the table do not include the effect of the
fund's $5.00 account closeout fee.
During the 10 year period ended January 31, 1998, a hypothetical
$10,000 investment in New York Municipal Money Market would have grown
to $14,088.
FIDELITY NEW YORK MUNICIPAL MONEY INDICES
MARKET FUND

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year Value Value Value Total S&P 500 DJIA Cost
Ended of of of Value of
Januar Initia Reinve Reinve Living
y 31 l sted sted
$10,00 Divide Capita
0 nd l Gain
Invest Distri Distri
ment bution bution
s s

1998 $ 10,000 $ 4,088 $ 0 $ 14,088 $ 51,011 $ 54,051 $ 13,967

1997 $ 10,000 $ 3,660 $ 0 $ 13,660 $ 40,195 $ 45,764 $ 13,751

1996 $ 10,000 $ 3,270 $ 0 $ 13,270 $ 31,815 $ 35,484 $ 13,345

1995 $ 10,000 $ 2,844 $ 0 $ 12,844 $ 22,943 $ 24,685 $ 12,990

1994 $ 10,000 $ 2,539 $ 0 $ 12,539 $ 22,823 $ 24,864 $ 12,636

1993 $ 10,000 $ 2,312 $ 0 $ 12,312 $ 20,220 $ 20,112 $ 12,325

1992 $ 10,000 $ 2,025 $ 0 $ 12,025 $ 18,281 $ 19,015 $ 11,936

1991 $ 10,000 $ 1,590 $ 0 $ 11,590 $ 14,898 $ 15,627 $ 11,634

1990 $ 10,000 $ 1,035 $ 0 $ 11,035 $ 13,747 $ 14,233 $ 11,011

1989 $ 10,000 $ 462 $ 0 $ 10,462 $ 12,009 $ 12,398 $ 10,467

</TABLE>

Explanatory Notes: With an initial investment of $10,000 in New York
Municipal Money Market on February 1, 1988, the net amount invested in
fund shares was $10,000. The cost of 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 $14,088. 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 $3,433 for dividends. The fund did not
distribute any capital gains during the period. The fund did not
distribute any capital gains during the period.
During the 10 year period ended January 31, 1998, a hypothetical
$10,000 investment in Spartan New York Municipal Income would have
grown to $ 21,733 .
SPARTAN NEW YORK MUNICIPAL INCOME INDICES
FUND

1998 $ 11,262 $ 9,479 $ 992 $ 21,733 $ 51,011 $ 54,051 $ 13,967

1997 $ 10,696 $ 8,005 $ 911 $ 19,612 $ 40,195 $ 45,764 $ 13,751

1996 $ 10,914 $ 7,160 $ 926 $ 19,000 $ 31,815 $ 35,484 $ 13,345

1995 $ 9,896 $ 5,612 $ 830 $ 16,338 $ 22,943 $ 24,685 $ 12,990

1994 $ 11,358 $ 5,393 $ 590 $ 17,341 $ 22,823 $ 24,864 $ 12,636

1993 $ 11,018 $ 4,368 $ 0 $ 15,386 $ 20,220 $ 20,112 $ 12,325

1992 $ 10,540 $ 3,286 $ 0 $ 13,826 $ 18,281 $ 19,015 $ 11,936

1991 $ 10,139 $ 2,329 $ 0 $ 12,468 $ 14,898 $ 15,627 $ 11,634

1990 $ 10,139 $ 1,501 $ 0 $ 11,640 $ 13,747 $ 14,233 $ 11,011

1989 $ 10,113 $ 725 $ 0 $ 10,838 $ 12,009 $ 12,398 $ 10,467

</TABLE>

Explanatory Notes: With an initial investment of $10,000 in Spartan
New York Municipal Income on February 1, 1988, 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 $19,789. 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 $6,283 for dividends
and $634 for capital gains distributions.
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Analytical Services, Inc.
(Lipper), an independent service located in Summit, New Jersey that
monitors the performance of mutual funds. Generally, Lipper rankings
are based on total return, assume reinvestment of distributions, do
not take sales charges or trading fees into consideration, and are
prepared without regard to tax consequences. Lipper may also rank
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. 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's performance may also be compared to that of a benchmark index
representing the universe of securities in which the fund may invest.
The total return of a benchmark index reflects reinvestment of all
dividends and capital gains paid by securities included in the index.
Unlike a fund's returns, however, the index returns do not reflect
brokerage commissions, transaction fees, or other costs of investing
directly in the securities included in the index.
The bond fund may compare to the Lehman Brothers Municipal Bond
Index, a total return performance benchmark for investment-grade
municipal bonds with maturities of at least one year. In addition,
Spartan New York Municipal Income may compare its performance to that
of the Lehman Brothers New York 4 Plus Year Municipal Bond Index, a
total return performance benchmark for New York investment-grade
municipal bonds with maturities of at least four years. Issues
included in the index have been issued after December 31, 1990 and
have an outstanding par value of at least $50 million. Subsequent to
December 31, 1995, zero coupon bonds and issues subject to the
alternative minimum tax are included in the index.
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 money market fund may compare its performance or the
performance of securities in which it may invest to averages published
by IBC Financial Data, Inc. of Ashland, Massachusetts. These averages
assume reinvestment of distributions. IBC's MONEY FUND REPORT
AVERAGES(trademark)/All Tax Free, which is reported in IBC's MONEY
FUND REPORT(trademark), covers over 419 tax-free money market funds.
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;
and charitable giving. In addition, Fidelity may quote or
reprint financial or business publications and periodicals as they
relate to current economic and political conditions, fund management,
portfolio composition, investment philosophy, investment techniques,
the desirability of owning a particular mutual fund, and Fidelity
services and products. Fidelity may also reprint, and use as
advertising and sales literature, articles from Fidelity
Focus(Registered trademark), a quarterly magazine provided free of
charge to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manager.
VOLATILITY. A bond fund may quote various measures of
volatility and benchmark correlation in advertising. In addition, the
fund may compare these measures to those of other funds. Measures of
volatility seek to compare the fund's historical share price
fluctuations or 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 bond 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 bond fund may advertise examples of the effects of periodic
investment plans, including the principle of dollar cost averaging.
In such a program, an investor invests a fixed dollar amount in a
fund at periodic intervals, thereby purchasing fewer shares when
prices are high and more shares when prices are low. While such a
strategy does not assure a profit or guard against loss in a declining
market, the investor's average cost per share can be lower than if
fixed numbers of shares are purchased at the same intervals. In
evaluating such a plan, investors should consider their ability to
continue purchasing shares during periods of low price levels.
As of January 31, 1998, FMR advised over $31 billion in tax-free
fund assets, $102 billion in money market fund assets, $398 billion in
equity fund assets, $69 billion in international fund assets, and $27
billion in Spartan fund assets. The funds may reference the growt h
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 , EXCHANGE AND REDEMPTION INFORMATION
Each fund is open for business and its NAV is calculated each day the
NYSE is open for trading. The NYSE has designated the following
holiday closings for 1998 : New Year's Day, Martin Luther
King's Birthday , Presidents' Day, Good Friday, Memorial Day,
Independence Day (observed), 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, on days when the Federal Reserve Wire
System is closed, federal funds wires cannot be sent.
For Spartan New York Municipal Money Market and Spartan New York
Municipal Income, FSC normally determines each fund's NAV
as of the close of the NYSE (normally 4:00 p.m. Eastern time). FSC
normally calculates New York Municipal 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 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 each 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 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. 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 whose interest FMR
believes is free from federal income tax. Generally, issuers or other
parties have entered into covenants requiring continuing compliance
with federal tax requirements to preserve the tax-free status of
interest payments over the life of the security. If at any time the
covenants are not complied with, or if the IRS otherwise determines
that the issuer did not comply with relevant tax requirements,
interest payments from a security could become federally taxable
retroactive to the date the security was issued. For certain types of
structured securities, the tax status of the pass-through of tax-free
income may also be based on the federal and state tax treatment of the
structure.
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
distributions 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 municipal bonds purchased with market
discount after April 30, 1993 and short-term capital gains distributed
by a municipal 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 distributions is free from federal income tax. Each
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.
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. Individual shareholders of a fund will not be
required to include their gross income for New York State and City
purposes any portion of distributions received from a fund that are
directly attributable (i) to interest earned on tax-exempt obligations
issued by New York State or any political subdivision thereof
(including New York City) or (ii) provided that a fund qualifies as a
RIC and satisfies the requirement that at least 50% of its assets at
the close of each quarter of its taxable year constitute obligations
the interest of which are tax-exempt for federal income tax purposes.
Distributions from a fund that are attributable to sources other than
those described in the preceding sentence (including interest on
obligations of other states and their political subdivisions) will
generally be taxable to individual shareholders as ordinary
income.
Shareholders of a fund that are subject to the New York State
corporation franchise tax or the New York City general corporation tax
will be required to include exempt-interest dividends paid by a fund
in their "entire net income" for purposes of such taxes and will be
required to include their shares of a fund in their investment capital
for purposes of such taxes.
If a shareholder is subject to unincorporated business taxation by
New York City, income and gains distributed by a fund will be subject
to such taxation except to the extent such distributions are directly
attributable to interest earned on tax-exempt obligations issued by
New York State or any political subdivision thereof (including New
York City). However, shareholders of a fund will not be subject to the
unincorporated business tax imposed by New York City solely by reason
of their ownership of shares in a fund.
Shares of a fund will not be subject to property taxes imposed by
New York State or City.
Interest on indebtedness incurred to purchase, or continued to
carry, shares of New York Municipal Income generally will not be
deductible for New York State personal income tax purposes.
Interest income on a fund that is distributed to its shareholders
will generally not be taxable to a fund for purposes of the New York
State corporation franchise tax or the New York City general
corporation tax.
The foregoing is a general, abbreviated summary of certain of the
provisions of the tax laws of New York State and City presently in
effect as they directly govern the taxation of shareholders of a fund.
These provisions are subject to change by legislative or
administrative action, and any such change may be retroactive with
respect to a fund's transactions. Shareholders are advised to consult
with their own tax advisers for more detailed information concerning
New York State and City matters.
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 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 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. Each money market fund may
distribute any net realized short-term capital gains once a year or
more often as necessary, to maintain its NAV at $1.00. The money
market funds do not anticipate distributing long-term capital gains.
As of January 31, 1998, Spartan New York Municipal Income
hereby designates approximately $503,000 as a capital gain
dividend for the purpose of the dividend-paid deduction.
As of January 31, 1998, Spartan New York Municipal Money Market had
a capital loss carryforward aggregating approximately $141,000. This
loss carryforward, of which $20, $21,000, $51,000, $28,000 and $41,000
will expire January 31, 2000, 2001, 2002, 2005, and 2006,
respectively.
As of January 31, 1998, Fidelity New York Municipal Money Market
had a capital loss carryforward aggregating approximately $124,000.
This loss carryforward, of which $38,000, $3,000, $33,000 and $50,000
will expire January 31, 2001, 2004, 2005, and 2006, respectively.
As of January 31, 1998, Spartan New York Municipal Income had a
capital loss carryforward aggregating approximately $4,544,000. This
loss will expire on January 31, 2003.
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 , and intends to comply
with other tax rules applicable to regulated investment
companies .
Each fund is treated as a separate entity from the other
funds , if any, of its 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 1940 Act, control of a company is presumed where one individual or
group of individuals owns more than 25% of the voting stock of that
company. Therefore, through their ownership of voting common stock and
the execution of the shareholders' voting agreement, members of the
Johnson family may be deemed, under the 1940 Act, to form a
controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
Fidelity investment personnel may invest in securities for their
own accounts pursuant to a code of ethics that sets forth all
employees' fiduciary responsibilities regarding the funds, establishes
procedures for personal investing and restricts certain transactions.
For example, all personal trades in most securities require
pre-clearance, and participation in initial public offerings is
prohibited. In addition, restrictions on the timing of personal
investing in relation to trades by Fidelity funds and on short-term
trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board , 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 to Fidelity New York Municipal Trust prior to the fund's
conversion from a series of a Massachusetts business trust served in
identical capacities. All persons named as Trustees and Members of
the Advisory Board also serve in similar capacities for other
funds advised by FMR. The business address of each Trustee, Member of
the Advisory Board, 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 (67), Trustee and President, is Chairman,
Chief Executive Officer and a Director of FMR Corp.; a Director and
Chairman of the Board and of the Executive Committee of FMR; Chairman
and a Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
J. GARY BURKHEAD (56), Member of the Advisory Board (1997), is Vice
Chairman and a Member of the Board of Directors of FMR Corp. (1997)
and President of Fidelity Personal Investments and Brokerage Group
(1997). Previously, Mr. Burkhead served as President of Fidelity
Management & Research Company.
RALPH F. COX (65) , Trustee, is President of RABAR
Enterprises (management consulting-engineering industry, 1994).
Prior to February 1994, he was President of Greenhill Petroleum
Corporation (petroleum exploration and production). Until March 1990,
Mr. Cox was President and Chief Operating Officer of Union Pacific
Resources Company (exploration and production). He is a Director of
USA Waste Services, Inc. (non-hazardous waste, 1993), CH2M Hill
Companies (engineering), Rio Grande, Inc. (oil and gas
production), and Daniel Industries (petroleum measurement equipment
manufacturer). In addition, he is a member of advisory boards of Texas
A&M University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS (66) , Trustee. 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),
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.
ROBERT M. GATES (54) , Trustee (1997), is a consultant, author,
and lecturer (1993). Mr. Gates was Director of the Central
Intelligence Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates
served as Assistant to the President of the United States and Deputy
National Security Advisor. Mr. Gates is Director of Lucas Variety
PLC (automotive components and diesel engines), Charles Stark Draper
Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (original equipment and replacement
products). Mr. Gates also is a Trustee of the Forum for International
Policy and of the Endowment Association of the College of William and
Mary. In addition, he is a member of the National Executive Board of
the Boy Scouts of America.
E. BRADLEY JONES (70) , Trustee. 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), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products), and he
previously served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc. (mining), and as a
Trustee of First Union Real Estate Investments. In addition, he
serves as a Trustee of the Cleveland Clinic Foundation, where
he has also been a member of the Executive Committee as well as
Chairman of the Board and President, a Trustee and member of the
Executive Committee of University School (Cleveland), and a Trustee of
Cleveland Clinic Florida.
DONALD J. KIRK (65), 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, Chairman
of the Board of Trustees of the Greenwich Hospital Association, a
Member of the Public Oversight Board of the American Institute of
Certified Public Accountants' SEC Practice Section (1995), and as a
Public Governor of the National Association of Securities Dealers,
Inc. (1996).
*PETER S. LYNCH (54) , Trustee, is Vice Chairman and Director of
FMR. Prior to May 31, 1990, he was a Director of FMR and Executive
Vice President of FMR (a position he held until March 31, 1991); Vice
President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). In addition, he
serves as a Trustee of Boston College, Massachusetts Eye & Ear
Infirmary, Historic Deerfield (1989) and Society for the Preservation
of New England Antiquities, and as an Overseer of the Museum of Fine
Arts of Boston.
WILLIAM O. McCOY (64) , Trustee (1997), is the Vice President of
Finance for the University of North Carolina (16-school system, 1995).
Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman
of the Board of BellSouth Corporation (telecommunications, 1984) and
President of BellSouth Enterprises (1986). He is currently a Director
of Liberty Corporation (holding company, 1984), Weeks Corporation of
Atlanta (real estate, 1994), Carolina Power and Light Company
(electric utility, 1996), and the Kenan Transport Co. (1996).
Previously, he was a Director of First American Corporation (bank
holding company, 1979-1996). In addition, Mr. McCoy serves as a member
of the Board of Visitors for the University of North Carolina at
Chapel Hill (1994) and for the Kenan-Flager Business School
(University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (68) , Trustee and Chairman of the
non-interested Trustees, is Chairman of G.M. Management Group
(strategic advisory services). Mr. McDonough is a Director of
York International Corp. (air conditioning and refrigeration),
Commercial Intertech Corp. (hydraulic systems, building systems, and
metal products, 1992), CUNO, Inc. (liquid and gas filtration products,
1996), and Associated Estates Realty Corporation (a real estate
investment trust, 1993). Mr. McDonough served as a Director of
ACME-Cleveland Corp. (metal working, telecommunications, and
electronic products) from 1987-1996 and Brush-Wellman Inc. (metal
refining) from 1983-1997.
MARVIN L. MANN (64) , 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), Imation Corp. (imaging and information
storage, 1997), 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.
*ROBERT C. POZEN (51), Trustee (1997) and Senior Vice President, is
also President and a Director of FMR (1997); and President and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc. (1997), and Fidelity
Management & Research (Far East) Inc. (1997). Previously, Mr. Pozen
served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp.
THOMAS R. WILLIAMS (69) , 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 ConAgra, Inc. (agricultural products), Georgia Power
Company (electric utility), National Life Insurance Company of
Vermont, American Software, Inc., and AppleSouth, Inc. (restaurants,
1992).
DWIGHT D. CHURCHILL ( 44 ), is Vice President of Bond Funds,
Group Leader of the Bond Group, Senior Vice Presi dent of FMR
(1997), and Vice President of FIMM (1998). Mr. Churchill joined
Fidelity in 1993 as Vice President and Group Leader of Taxable
Fixed-Income Investments.
BOYCE I. GREER (42) , is Vice President of Money Market Funds
(1997), Group Leader of the Money Market Group (1997), Senior Vice
President of FMR (1997), and Vice President of FIMM (1998). Mr. Greer
served as the Leader of the Fixed-Income Group for Fidelity Management
Trust Company (1993-1995) and was Vice President and Group Leader of
Municipal Fixed-Income Investments (1996-1997).
FRED L. HENNING, JR. (58), is Vice President of Fidelity's
Fixed-Income Group (1995), Senior Vice President of FMR (1995), and
Senior Vice President of FIMM (1998). Before assuming his current
responsibilities, Mr. Henning was head of Fidelity's Money Market
Division.
DIANE M. McLAUGHLIN (34), is Vice President of Fidelity New
York Municipal Money Market Fund (1997), Spartan New York Municipal
Money Market Fund (1997), and other funds advised by FMR. Prior to her
current responsibilities, Ms. McLaughlin has served as a senior trader
and managed a variety of funds.
NORMAN U. LIND (41), is Vice President of Spartan New
York Municipal Income Fund (1996), and other funds advised by
FMR. Prior to his current responsibilities, Mr. Lind managed a
variety of Fidelity funds.
ERIC D. ROITER (49), Secretary (1998), is Vice President (1998) and
General Counsel of FMR (1998). Mr. Roiter was an Adjunct Member,
Faculty of Law, at Columbia University Law School (1996-1997). Prior
to joining Fidelity, Mr. Roiter was a partner at Debevoise & Plimpton
(1981-1997) and served as an Assistant General Counsel of the U.S.
Securities and Exchange Commission (1979-1981).
RICHARD A. SILVER (51), Treasurer (1997), is Treasurer of the
Fidelity funds and is an employee of FMR (1997). Before joining FMR,
Mr. Silver served as Executive Vice President, Fund Accounting &
Administration at First Data Investor Services Group, Inc.
(1996-1997). Prior to 1996, Mr. Silver was Senior Vice President and
Chief Financial Officer at The Colonial Group, Inc. Mr. Silver also
served as Chairman of the Accounting/Treasurer's Committee of the
Investment Company Institute (1987-1993).
THOMAS D. MAHER (52) , Assistant Vice President, is Assistant
Vice President of Fidelity's M unicipal B ond F unds
(1996) and of Fidelity's M oney M arket
F unds .
JOHN H. COSTELLO (51) , Assistant Treasurer, is an employee of
FMR.
LEONARD M. RUSH (52) , 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) and Chief Financial Officer of Fidelity Brokerage
Services, Inc. (1990-1993).
THOMAS J. SIMPSON (39 ), Assistant Treasurer, is Assistant
Treasurer of Fidelity's municipal bond funds (1996) and of Fidelity's
money market funds (1996) and an employee of FMR (1996). Prior to
joining FMR, Mr. Simpson was Vice President and Fund Controller of
Liberty Investment Services (1987-1995).
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of each fund
for his or her services for the fiscal year ended January 31 ,
1998 or calendar year ended December 31, 1997, as applicable.
Compensation Table

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Trustees Aggregate Aggregate Aggregate Total
and Compensat Compensat Compensat Compensat
Members of the ion ion from ion from ion from
Advisory Board from Fidelity Spartan the
Spartan NY Muni NY Fund
NY Muni Money Muni Complex * ,
Money Market B Income B A
Market B

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

Ralph F. Cox $ 313 $ 374 $ 170 $ 214,500

Phyllis Burke $ 306 $ 366 $ 166 $ 210,700
Davis

Robert M. Gates*** $ 290 $ 347 $ 157 $ 176,000

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

E. Bradley Jones $ 308 $ 369 $ 167 $ 211,500

Donald J. Kirk $ 308 $ 369 $ 167 $ 211,500

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

William O. $ 320 $ 384 $ 174 $ 214,500
McCoy****

Gerald C. $ 385 $ 462 $ 209 $ 264,500
McDonough

Marvin L. Mann $ 309 $ 369 $ 167 $ 214,500

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

Thomas R. Williams $ 313 $ 374 $ 170 $ 214,500

</TABLE>

* Information is for the calendar year ended December 31, 199 7
for 23 0 funds in the complex.
** Interested Trustees of the funds and Mr. Burkhead are
compensated by FMR.
*** Mr. Gates was appointed to the Board of Trustees of Fidelity New
York Municipal Trust effective March 1, 1997. Mr. Gates was
elected to the Board of Trustees of Fidelity New York Municipal Trust
II on March 19, 1997.
**** Mr. McCoy was appointed to the Board of Trustees of Fidelity New
York Municipal Trust effective January 1, 1997. Mr. McCoy was
elected to the Board of Trustees of Fidelity New York Municipal Trust
II on March 19, 1997.
A Compensation figures include cash, amounts required to be
deferred, and may include amounts deferred at the election of
Trustees. For the calendar year ended December 31, 1997, the Trustees
accrued required deferred compensation from the funds as follows:
Ralph F. Cox, $75,000, Phyllis Burke Davis, $75,000, Robert M. Gates,
$62,500, E. Bradley Jones, $75,000, Donald J. Kirk, $75,000, William
O. McCoy, $75,000, Gerald C. McDonough, $87,500, Marvin L. Mann,
$75,000, and Thomas R. Williams, $75,000. Certain of the
non-interested Trustees elected voluntarily to defer a portion of
their compensation: Ralph F. Cox, $53,699, Marvin L. Mann, $53,699,
and Thomas R. Williams, $62,462.
B Compensation figures include cash .
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of , and may elect to defer receipt of
an additional portion of , their annual fees. Amounts
deferred under the Plan are subject to vesting and are treated as
though equivalent dollar amounts had been invested in
shares of a cross-section of Fidelity funds including funds in each
major investment discipline and representing a majority of Fidelity's
assets under management (the Reference Funds). The amounts ultimately
received by the Trustees will be directly linked to the investment
performance of the Reference Funds. Deferral of fees in accordance
with the Plan will have a negligible effect on a fund's assets,
liabilities, and net income per share, and will not obligate a fund to
retain the services of any Trustee or to pay any particular level of
compensation to the Trustee. A fund may invest in the
Reference Funds under the Plan without shareholder approval.
T he amounts required to be deferred by the
non-interested Trustees' Plan accounts are subject to vesting and are
treated as though equivalent dollar amounts had been invested in
shares of the Reference Funds. The amounts ultimately received by the
Trustees will be directly linked to the investment performance
of the Reference Funds. The termination of the retirement program and
related crediting of estimated benefits to the Trustees' Plan accounts
did not result in a material cost to the funds.
As of January 31, 1998, the Trustees, Members of the Advisory
board, and officers of each fund owned, in the aggregate, less than 1%
of each fund's total outstanding shares.
As of January 31, 1998, the following owned of record 5% of more of
a fund's outstanding shares:
Spartan New York Municipal Money Market: National Financial
Services Corporation, Boston, MA (37.81%).
MANAGEMENT CONTRACTS
FMR is manager of Spartan New York Municipal Money Market, N ew
York Municipal Money Market, and Spartan New York Municipal Income
pursuant to management contracts dated March 22, 1994, April 1, 1997,
and February 1, 1994, respectively, which were approved by
shareholders on January 19, 1994, March 24, 1997, and January 19,
1994, respectively. N ew York Municipal Money M arket's
prior management contract, dated December 31, 1991, 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.
MANAGEMENT SERVICES. Each fund employs FMR to furnish
investment advisory and other services. Under the terms of its
management contract with each fund, FMR acts as investment adviser
and, subject to the supervision of the Board of Trustees, directs
the investments of the fund in accordance with its investment
objective, policies, and limitations. FMR also provides each fund with
all necessary office facilities and personnel for servicing the fund's
investments, compensates all officers of each fund and all
Trustees who are "interested persons" of the 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 securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for each fund; and furnishing
reports, evaluations, and analyses on a variety of subjects to the
Trustees.
MANAGEMENT-RELATED EXPENSES (NEW YORK MUNICIPAL MONEY MARKET
AND SPARTAN NEW YORK MUNICIPAL INCOME). In addition to the management
fee payable to FMR and the fees payable to the transfer, dividend
disbursing, and shareholder servicing agent, and pricing and
bookkeeping agent, each fund pays all o f its expenses that are not
assumed by those parties. Each fund pays for the typesetting,
printing, and mailing of its proxy materials to shareholders, legal
expenses, and the fees of the custodian, auditor and non-interested
Trustees. Each fund's management contract further provides that the
fund will pay for typesetting, printing, and mailing prospectuses,
statements of additional information, notices, and reports to
shareholders; however, under the terms of each fund's transfer
agent agreement, the transfer agent bears the costs of providing these
services to existing shareholders . Other expenses paid by each
fund include interest, taxes, brokerage commissions, each fund's
proportionate share of insurance premiums and Investment Company
Institute dues, and the costs of registering shares under federal
securities laws and making necessary filings under state securities
laws. Each fund is also liable for such non-recurring expenses as may
arise, including costs of any litigation to which the fund may be a
party, and any obligation it may have to indemnify its officers and
Trustees with respect to litigation.
MANAGEMENT-RELATED EXPENSES (SPARTAN NEW YORK MUNICIPAL MONEY
MARKET). Under the terms of its management contract with the
fund, FMR is responsible for payment of all operating expenses of
the fund with certain exceptions. Specific expenses payable by FMR
include expenses for typesetting, printing, and mailing proxy
materials to shareholders, legal expenses, fees of the custodian,
auditor and interested Trustees, the fund's proportionate share of
insurance premiums and Investment Company Institute dues, and the
costs of registering shares under federal securities laws and making
necessary filings under state securities laws. The fund's management
contract further provides that FMR will pay for typesetting, printing,
and mailing prospectuses, statements of additional information,
notices, and reports to shareholders ; however, under the terms of
the fund's transfer agent agreement, the transfer agent bears the
costs of providing these services to existing shareholders . FMR
also pays all fees associated with transfer agent, dividend
disbursing, and shareholder services, and pricing and bookkeeping
services.
FMR pays all other expenses of Spartan New York Municipal Money Market
with the following exceptions: fees and expenses of the non-interested
Trustees, interest, taxes, brokerage commissions (if any), and such
nonrecurring expenses as may arise, including costs of any litigation
to which the fund may be a party, and any obligation it may have to
indemnify its officers and Trustees with respect to litigation.
MANAGEMENT FEES. For the services of FMR under the management
contract, Spartan New York Municipal Money Market pays FMR a monthly
management fee at the annual rate of 0.50% of its average net assets
throughout the month.
The management fee paid to FMR by Spartan New York Municipal Money
Market is reduced by an amount equal to the fees and expenses paid
by the fund to the non-interested Trustees.
For the services of FMR under each management contract, each of
N ew York Municipal Money Market and Spartan New York
Municipal Income pays FMR a monthly management fee which has two
components: a group fee rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of all
of the registered investment companies with which FMR has management
contracts.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

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

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

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

P rior to April 1, 1997, for New York Municipal Money Market,
and prior to February 1, 1994, for Spartan New York Municipal
Income the group fee rate was based on a schedule with breakpoints
ending at .1500% for average group assets in excess of $84 billion.
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. Spartan New York Municipal
Income's current management contract reflects these extensions of
the group fee rate schedule.
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 is 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;
for Spartan New York Municipal Income, these new breakpoints were
added pending shareholder 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 shown in the schedule below. New York Municipal Money Market's
current management contract reflects the group fee rate schedule above
for average group assets under $156 billion and the group fee rate
schedule below for average group assets in excess of $156 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

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

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

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

The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $ 555 billion of group net assets - the approximate
level for January 1998 - was .1370 %, which is the weighted
average of the respective fee rates for each level of group net assets
up to $ 555 billion.
The individual fund fee rate for N ew York Municipal Money
Market and Spartan New York Municipal Income is 0.25 %.
Based on the average group net assets of the funds advised by FMR for
January 1998 , each of New York Municipal Money Market's and Spartan
New York Municipal Income's annual management fee rate would be
calculated as follows:

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

NY Muni Money 0.1370% + 0.25% = 0.3870%
Market

Spartan NY Muni 0.1370% + 0.25% = 0.3870%
Income

</TABLE>

One-twelfth of this annual management fee rate is applied to each of
N ew York Municipal Money Market's and Spartan New York
Municipal Income's net assets averaged for the most recent month,
giving a dollar amount, which is the fee for that month.
The following table shows the amount of management fees paid by each
fund to FMR for the past three fiscal years, and the amount of credits
reducing management fees for Spartan New York Municipal Money Market.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fund Fiscal Amount of Managemen
Years Credits Reducing t Fees
Ended Management Fees Paid to
January FMR
31

Spartan NY Muni 1998 $ 17,057 $ 3,781,
Money Market 884*

1997 $ 47,178 $ 3,461,
401*

1996 $ 23,177 $ 2,999,
668*

NY Muni Money Market 1998 N/A $ 3,589,
395

1997 N/A $ 3,261,
467

1996 N/A $ 3,049,
495

Spartan NY Muni 1998 N/A $ 1,731,
Income 659

1997 N/A $ 1,618,
491

1996 N/A $ 1,683,
089

</TABLE>

* After reduction of fees and expenses paid by the fund to the
non-interested Trustees.
FMR may, from time to time, voluntarily reimburse all or a portion of
a fund' s expenses (exclusive of interest, taxes,
brokerage commissions, and extraordinary expenses) , which in the
case of certain funds is subject to revision or termination . FMR
retains the ability to be repaid for these expense reimbursements in
the amount that expenses fall below the limit prior to the end of the
fiscal year.
Expense reimbursements by FMR will increase a fund's total returns and
yield, and repayment of the reimbursement by a fund will lower its
total returns and yield.
During the past three fiscal years, FMR voluntarily agreed to
reimburse Spartan New York Municipal Income if and to the extent that
the fund's aggregate operating expenses, including management fees,
were in excess of an annual rate of its average net assets. The table
below shows the periods of reimbursement and levels of expense
limitations for the applicable fund; the dollar amount of management
fees incurred under the fund's contract before reimbursement; and the
dollar amount reimbursed by FMR under the expense reimbursement for
each period.
Periods of Aggrega Fiscal Managem Amount
Expense te Year ent Fee of
Limitation Operati Ended Before Managem
From ng Reimbur ent Fee
To Expense sement Reimbur
Limitat sement
ion

Spartan 1/9/98 * 0.53% 1/98 $ 198,124 $ 5,934
NY

Muni 4/1/97 1/8/98 0.55% 1/98 $ 1,248 $ 70,763
Income ,591

* Effective January 9, 1998, FMR has voluntarily agreed, through
December 31, 1999, to reimburse Spartan New York Municipal Income to
the extent that total operating expenses (excluding interest, taxes,
brokerage commissions, and extraordinary expenses) exceed 0.53% of its
average net assets.
To defray shareholder service costs, FMR or its affiliates also
collect Spartan New York Municipal Money Market's $5.00 exchange fee,
$5.00 account closeout fee, $5.00 fee for wire purchases and
redemptions, and $2.00 checkwriting charge. Shareholder transaction
fees and charges collected by FMR are shown in the table below.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Period Exchang Account Wire Fees Checkwr
Ended e Fees Closeou iting
January t Fees Charges
31

Spartan NY Muni 1998 $ 2,710 $ 854 $ 1,030 $ 4,882
Money Market

1997 $ 2,335 $ 643 $ 830 $ 3,616

1996 $ 3,935 $ 996 $ 1,180 $ 5,645

</TABLE>

SUB-ADVISER. On behalf of Spartan New York Municipal Money Market and
New York Municipal Money Market, FMR has entered into sub-advisory
agreements with FIMM pursuant to which FIMM has primary
responsibility for providing portfolio investment management services
to the funds.
Under the terms of the sub-advisory agreements, FMR pays FIMM
fees equal to 50% of the management fee payable to FMR under its
management contract with Spartan New York Municipal Money Market and
New York Municipal Money Market, respectively. The fees paid to
FIMM are not reduced by any voluntary or mandatory expense
reimbursements that may be in effect from time to time.
Fees paid to FMR Texas , Inc., the predecessor company to FIMM,
by FMR on behalf of Spartan New York Municipal Money Market and New
York Municipal Money Market for the past three fiscal years are shown
in the table below.
Fund Fiscal Year Ended Fees Paid to FMR
January 31 Texas

Spartan N Y Muni 1998 $ 1,899,471
Money Market

1997 $ 1,754,290

1996 $ 1,511,423

NY Muni Money 1998 $ 1,794,698
Market

1997 $ 1,630,7 3 4

1996 $ 1,524,748

DISTRIBUTION AND SERVICE PLANS
The Trustees have approved Distribution and Service Plans on behalf of
each fund (the Plans pursuant to Rule 12b-1 under the 1940 Act (the
Rule). The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of the fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plans, as approved by the Trustees, allow the funds and FMR to incur
certain expenses that might be considered to constitute indirect
payment by the funds of distribution expenses.
Under each Plan, if the payment of management fees by the fund to FMR
is deemed to be indirect financing by the fund of the distribution of
its shares, such payment is authorized by the Plan. Each Plan
specifically recognizes that FMR may use its management fee revenue,
as well as its past profits or its other resources, to pay FDC
for expenses incurred in connection with the distribution of fund
shares. In addition, each Plan provides that FMR, directly or
through FDC, may make payments to third parties, such as banks or
broker-dealers, that engage in the sale of fund shares, or provide
shareholder support services. Currently, the Board of Trustees has
authorized such payments for each fund's shares.
FMR made no payments either directly or through FDC to third parties
for the fiscal year ended 1998.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will
benefit the fund and its shareholders. In particular, the Trustees
noted that each Plan does not authorize payments by the fund other
than those made to FMR under its management contract with the fund. To
the extent that each Plan gives FMR and FDC greater flexibility in
connection with the distribution of fund shares, additional sales of
fund shares 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 Municipal Money Market's Plan, Fidelity New York
Municipal Money Market's Plan, and Spartan New York Municipal Income's
Plan were approved by shareholders on January 19, 1994, October 23,
1991, and November 28, 1996, respectively.
The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from engaging in the business of
underwriting, selling, or distributing securities. Although the scope
of this prohibition under the Glass-Steagall Act has not been clearly
defined by the courts or appropriate regulatory agencies, FDC believes
that the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks and their affiliates
or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions,
if any, would be necessary to continue to provide efficient and
effective shareholder services. In such event, changes in the
operation of the funds might occur, including possible termination of
any automatic investment or redemption or other services then provided
by the bank. It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these
occurrences. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein, and
banks and other financial institutions may be required to register as
dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plans. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
CONTRACTS WITH FMR AFFILIATES
Each fund has entered into a transfer agent agreement with UMB.
Under the terms of the agreements, UMB provides transfer agency,
dividend disbursing, and shareholder services for each fund. UMB in
turn has entered into sub-transfer agent agreements with FSC ,
an affiliate of FMR. Under the terms of the sub-agreements, FSC
performs all processing activities associated with providing these
services for each fund and receives all related transfer agency fees
paid to UMB.
For providing transfer agency services, FSC receives an account fee
and an asset-based fee each paid monthly with respect to each account
in a fund. For retail accounts and certain institutional accounts,
these fees are based on account size and fund type. For certain
institutional retirement accounts, these fees are based on fund type.
For certain other institutional retirement accounts, these fees are
based on account type (i.e., omnibus or non-omnibus) and, for
non-omnibus accounts, fund type. The account fees are subject to
increase based on postage rate changes.
FSC also collects small account fees from certain accounts with
balances of less than $2,500.
In addition, UMB receives the pro rata portion of the
transfer agency fees applicable to shareholder accounts in each
Fidelity Freedom Fund, a fund of funds managed by an FMR affiliate,
according to the percentage of the Freedom Fund's assets that is
invested in a fund.
FSC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FSC bears the expense of typesetting,
printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
existing shareholders, with the exception of proxy statements.
FSC has entered into a sub-agreement with Fidelity Brokerage Services,
Inc. (FBSI), an affiliate of FMR. Under the terms of this
sub-agreement, FBSI performs certain recordkeeping, communication, and
other services for shareholders of New York Municipal Money Market
participating in the Fidelity Ultra Service Account program. FBSI
directly charges a monthly administrative fee to each Ultra Service
Account client who chooses certain additional features. This fee is in
addition to the transfer agency fee received by FSC.
Each fund has also entered into a service agent agreement with UMB.
Under the terms of the agreements, UMB provides pricing and
bookkeeping services for each fund. UMB in turn has entered into
sub-service agent agreements with FSC. Under the terms of the
sub-agreements, FSC performs all processing activities associated with
providing these services, including calculating the NAV and dividends
for each fund and maintaining each fund's portfolio and general
accounting records, and receives all related pricing and bookkeeping
fees paid to UMB.
For providing pricing and bookkeeping services, FSC receives a monthly
fee based on each fund's average daily net assets throughout the
month. The annual fee rates for pricing and bookkeeping services are
0.0400% for fixed-income funds, and 0.0175% for money market
funds of the first $500 million of average net assets and 0.0200% for
fixed-income funds, and 0.0075% for money market funds of
average net assets in excess of $500 million. The fee, not including
reimbursement for out-of-pocket expenses, is limited to a minimum of
$60,000 for fixed income funds and $40,000 for money market funds and
a maximum of $800,000 per year.
Pricing and bookkeeping fees, including reimbursement for
out-of-pocket expenses, paid by the funds to FSC for the past three
fiscal years are shown in the table below.
Fund 1998 1997 1996

NY Muni Money Market $ 144,596 $ 131,819 $ 129,311

Spartan NY Muni Income $ 186,274 $ 173,496 $ 180,315

For Spartan New York Municipal Money Market, FMR bears the cost of
transfer agency, dividend disbursing, and shareholder services and
pricing and bookkeeping services under the terms of its management
contract with the fund.
Each fund has entered into a distribution agreement with FDC, an
affiliate of FMR organized as a Massachusetts corporation on July 18,
1960. FDC is a broker-dealer registered under the Securities Exchange
Act of 1934 and a member of the National Association of Securities
Dealers, Inc. The distribution agreements call for FDC to use all
reasonable efforts, consistent with its other business, to secure
purchasers for shares of the fund, which are continuously offered at
NAV. Promotional and administrative expenses in connection with the
offer and sale of shares are paid by FMR.
DESCRIPTION OF THE TRUSTS
TRUSTS' ORGANIZATION. Spartan New York Municipal Money Market Fund and
Fidelity New York Municipal Money Market Fund are funds (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, Spartan New York Municipal Money Market
Fund and Fidelity New York Municipal Money Market Fund are the only
two funds of the trust. 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 Portfolio, 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 Portfolio, a fund of Fidelity New York Municipal Trust, on
March 22, 1994. The Delaware trust's Trust Instrument permits the
Trustees to create additional funds.
Spartan New York Municipal Income Fund (the bond fund) is a fund
(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. Currently, the bond
fund is the only fund of the trust and, prior to March 23, 1998 was
known as Fidelity New York Municipal Income Fund. On January 22, 1998,
January 15, 1998, and January 8, 1998, respectively, the bond fund
acquired all of the assets of the Massachusetts trust's three other
series then designated 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.
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 any
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, 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 trust or the fund, as determined by the current value of each
shareholder's investment in the fund or 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 funds. The custodian is responsible
for the safekeeping of a fund's assets and the appointment of any
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.
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 funds' 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, 1998, and reports of the auditor, are
included in each fund's Annual Report, which are separate reports
supplied with this SAI. The funds' financial statements, including the
financial highlights, and reports of the auditor are incorporated
herein by reference. For a free additional copy of a fund's Annual
Report, contact Fidelity at 1-800-544-8888, 82 Devonshire Street,
Boston, MA 02109.
APPENDIX
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value
of each investment by the time remaining to its maturity, adding these
calculations, and then dividing the total by the value of the fund's
portfolio. An obligation's maturity is typically determined on a
stated final maturity basis, although there are some exceptions to
this rule.
For example, if it is probable that the issuer of an instrument will
take advantage of a maturity-shortening device, such as a call,
refunding, or redemption provision, the date on which the instrument
will probably be called, refunded, or redeemed may be considered to be
its maturity date. When a municipal bond issuer has committed to call
an issue of bonds and has established an independent escrow account
that is sufficient to, and is pledged to, refund that issue, the
number of days to maturity for the prerefunded bond is considered to
be the number of days to the announced call date of the bonds.
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 RATINGS OF MUNICIPAL
OBLIGATIONS
Moody's ratings for short-term municipal obligations will be
designated Moody's Investment Grade ("MIG"). A two-component rating is
assigned to variable rate demand obligations. The first component
represents an evaluation of the degree of risk associated with
scheduled principal repayment and interest payments and is designated
by a long-term rating, e.g., "Aaa" or "A." The second component
represents an evaluation of the degree of risk associated with the
demand feature and is designated "VMIG."
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.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF MUNICIPAL NOTES
Municipal notes maturing in three years or less will likely receive a
"note" rating symbol. Notes that have a put option or demand feature
are assigned a dual rating. The first rating addresses the likelihood
of repayment of principal and payment of interest due and for
short-term obligations is designated by a note rating symbol. The
second rating addresses only the demand feature, and is designated by
a commercial paper rating symbol, e.g., "A-1" or "A-2."
SP-1 - Strong capacity to pay principal and interest. Issues
determined to possess very strong characteristics are 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.
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF MUNICIPAL
OBLIGATIONS
Moody's ratings for long-term municipal obligations fall within nine
categories. They range from Aaa (highest quality) to C (lowest
quality). Those bonds within the Aa through B categories that Moody's
believes possess the strongest credit attributes within those
categories are designated by the symbol "1."
AAA - Bonds that 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 that 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 that 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 that 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 that 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 that 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.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF MUNICIPAL DEBT
Municipal debt issues may be designated by Standard & Poor's as either
investment grade ("AAA" through "BBB") or speculative grade ("BB"
through "D"). While speculative grade debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major exposures to adverse conditions. Ratings from
AA through CCC may be modified by the addition of a plus sign (+) or
minus sign (-) to show relative standing within the major rating
categories.
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 highest 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 rated 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.

Fidelity New York Municipal Trust II
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a)(1) Financial Statements and Financial Highlights, included in the
Annual Report, for Fidelity New York Municipal Money Market Fund, for
the fiscal year ended January 31, 1998, are incorporated herein by
reference to the fund's Statement of Additional Information and were
filed on March 16, 1998 for 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 Spartan New York Municipal Money Market Fund, for
the fiscal year ended January 31, 1998, are incorporated herein by
reference to the fund's Statement of Additional Information and were
filed on March 19, 1998 for 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) (a) Trust Instrument, dated June 20, 1991, is incorporated herein
by reference to Exhibit 1 of Post-Effective Amendment No. 12.
(b) Supplement to the Trust Instrument dated March 31, 1997, is
filed herein as Exhibit 1(b).
(2) By-Laws of the Trust, as amended, are incorporated herein by
reference to Fidelity Union Street Trust II's (File No. 33-43757)
Post-Effective Amendment No. 10.
(3) Not applicable.
(4) Not applicable.
(5) (a) Management Contract dated April 1, 1997, between Fidelity New
York Municipal Money Market Fund and Fidelity Management & Research
Company is filed herein as Exhibit 5(a).
(b) Management Contract between Spartan New York Municipal Money
Market Portfolio (currently known as Spartan New York Municipal Money
Market Fund) and Fidelity Management & Research Company, dated March
22, 1994, is incorporated herein by reference to Exhibit 5(b) of
Post-Effective Amendment No. 10.
(c) Sub-Advisory Agreement between FMR Texas Inc. and Fidelity
Management & Research Company on behalf of Fidelity New York Tax-Free
Money Market Portfolio, (currently known as Fidelity New York
Municipal Money Market Fund), dated December 30, 1991, is incorporated
herein by reference to Exhibit 5(c) of Post-Effective Amendment No.
12.
(d) Sub-Advisory Agreement between FMR Texas Inc. and Fidelity
Management & Research Company on behalf of Spartan New York Municipal
Money Market Portfolio, (currently known as Spartan New York Municipal
Money Market Fund), dated March 22, 1994, is incorporated herein by
reference to Exhibit 5(d) of Post-Effective Amendment No. 10.
(6) (a) General Distribution Agreement between Fidelity New York
Tax-Free Money Market Portfolio (currently known as Fidelity New York
Municipal Money Market Fund) and Fidelity Distributors Corporation,
dated December 31, 1991, is incorporated herein by reference to
Exhibit 6(a) of Post-Effective Amendment No. 12.
(b) General Distribution Agreement between Spartan New York
Municipal Money Market Portfolio (currently known as Spartan New York
Municipal Money Market Fund) and Fidelity Distributors Corporation
dated March 22, 1994 is incorporated herein by reference to Exhibit
6(b) of Post-Effective Amendment No. 14.
(c) Amendments to the General Distribution Agreement between the
Registrant and Fidelity Distributors Corporation, dated March 14, 1996
and July 15, 1996, are incorporated herein by reference to Exhibit
6(a) of Fidelity Court Street Trust's Post-Effective Amendment No. 61
(File No. 2-58774).
(7) (a) Retirement Plan for Non-Interested Person Trustees, Directors
or General Partners, as amended on November 16, 1995, is incorporated
herein by reference to Exhibit 7(a) of Fidelity Select Portfolio's
(File No. 2-69972) Post-Effective Amendment No. 54.
(b) The Fee Deferral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of September 14, 1995 and
amended through November 14, 1996, is incorporated herein by reference
to Exhibit 7(b) of Fidelity Aberdeen Street Trust's (File No.
33-43529) Post-Effective Amendment No. 19.
(8) (a) Custodian Agreement, 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 of Fidelity California
Municipal Trust's Post-Effective Amendment No. 28 (File No. 2-83367).
(b) Appendix A, dated September 18, 1997, to the Custodian
Agreement, dated December 1, 1994, between UMB Bank, n.a. and the
Registrant is incorporated herein by reference to Exhibit 8(b) of
Fidelity Municipal Trust II's Post-Effective Amendment No. 17 (File
No. 33-43986).
(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.
(q) Fidelity SIMPLE-IRAPlan Adoption Agreement, Company Profile Form,
and Plan Document, as currently in effect, is incorporated herein by
reference to Exhibit 14(q) of Fidelity Aberdeen Street Trust's (File
No. 33-43529) Post-Effective Amendment No. 19.
(15)(a) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity New York Tax-Free Money Market Portfolio (currently known as
Fidelity New York Municipal Money Market Fund) is incorporated herein
by reference to Exhibit 15(a) of Post-Effective Amendment No. 12.
(b) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
New York Municipal Money Market Portfolio (currently known as Spartan
New York Municipal Money Market Fund) is incorporated herein by
reference to Exhibit 15(b) of Post-Effective Amendment No. 9.
(16) Schedule for the computation of performance quotations for
Spartan New York Municipal Money Market Portfolio (currently known as
Spartan New York Municipal Money Market Fund) on behalf of the trust
is incorporated herein by reference to Exhibit 16 of Post-Effective
Amendment No. 12.
(17) Financial Data Schedules 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, the 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, 1998
Title of Class: Shares of Beneficial Interest
Name of Series Number of Record
Holders

Fidelity New York Municipal Money 33,294
Market Fund

Spartan New York Municipal Money 5,338
Market Fund

Item 27. Indemnification
Pursuant to Del. Code Ann. title 12 (sub-section) 3817, a Delaware
business trust may provide in its governing instrument for the
indemnification of its officers and trustees from and against any and
all claims and demands whatsoever. Article X, Section 10.02 of the
Trust Instrument states that the Registrant shall indemnify any
present trustee or officer to the fullest extent permitted by law
against liability, and all expenses reasonably incurred by him or her
in connection with any claim, action, suit or proceeding in which he
or she is involved by virtue of his or her service as a trustee,
officer, or both, and against any amount incurred in settlement
thereof. Indemnification will not be provided to a person adjudged by
a court or other adjudicatory body to be liable to the Registrant or
its shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of his or her duties (collectively,
"disabling conduct"), or not to have acted in good faith in the
reasonable belief that his or her action was in the best interest of
the Registrant. In the event of a settlement, no indemnification may
be provided unless there has been a determination, as specified in the
Trust Instrument, that the officer or trustee did not engage in
disabling conduct.
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
their own disabling conduct.
Pursuant to the agreement by which Fidelity Service Company, Inc.
("Service") is appointed sub-transfer agent, the Transfer Agent agrees
to indemnify Service for Service's losses, claims, damages,
liabilities and expenses (including reasonable counsel fees and
expenses) (losses) to the extent the Transfer Agent is entitled to and
receives indemnification from the Portfolio 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 (including reasonable counsel fees and
expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other
than the Registrant, including by a shareholder 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 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 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)
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held,
during the past two fiscal years, the following positions of a
substantial nature.
Edward C. Johnson 3d Chairman of the Board of
FMR; President and Chief
Executive Officer of FMR
Corp.; Chairman of the
Board and Director of FMR,
FMR Corp., FIMM, FMR
(U.K.) Inc., and FMR (Far
East) Inc.; Chairman of
the Board and
Representative Director of
Fidelity Investments Japan
Limited; President and
Trustee of funds advised
by FMR.

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

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

Marta Amieva Vice President of FMR.

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

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

Barry Coffman Vice President of FMR.

Arieh Coll Vice President of FMR.

Stephen G. Manning Assistant Treasurer of
FMR.

William Danoff Senior Vice President of
FMR and Vice President of
a fund advised by FMR.

Scott E. DeSano Vice President of FMR.

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

George C. Domolky Vice President of FMR.

Walter C. Donovan Vice President of FMR.

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

Margaret L. Eagle Vice President of FMR and
of funds advised by FMR.

William R. Ebsworth Vice President of FMR.

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

Gregory Fraser Vice President of FMR and
of a fund advised by FMR.

Jay Freedman Assistant Clerk of FMR;
Clerk of FMR Corp., FMR
(U.K.) Inc., and FMR (Far
East) Inc.; Secretary of
FIMM.

Robert Gervis Vice President of FMR.

David L. Glancy Vice President of FMR and
of a fund advised by FMR.

Kevin E. Grant Vice President of FMR and
of funds advised by FMR.

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

Boyce I. Greer Senior Vice President of
FMR and Vice President of
Money Market Funds advised
by FMR.

Bart A. Grenier Vice President of
High-Income Funds advised
by FMR;Vice President of
FMR.

Robert Haber Vice President of FMR.

Richard C. Habermann Senior Vice President of
FMR; Vice President of
funds advised by FMR.

Richard Hazelwood Vice President of FMR.

Fred L. Henning Jr. Senior Vice President of
FMR and Vice President of
Fixed-Income funds advised
by FMR.

Bruce T. Herring Vice President of FMR.

John R. Hickling Vice President of FMR and
of a fund advised by FMR.

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

Curt Hollingsworth Vice President of FMR and
of funds advised by FMR.

Abigail P. Johnson Senior Vice President of
FMR and Vice President of
funds advised by FMR;
Associate Director and
Senior Vice President of
Equity funds advised by
FMR.

David B. Jones Vice President of FMR.

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

Francis V. Knox Vice President of FMR;
Compliance Officer of FMR
(U.K.) Inc.

Robert A. Lawrence Senior Vice President of
FMR and Vice President of
Fidelity Real Estate High
Income and Fidelity Real
Estate High income II
funds advised by FMR;
Associate Director and
Senior Vice President of
Equity funds advised by
FMR; Previously, Vice
President of High Income
funds advised by FMR.

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

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

Mark G. Lohr Vice President of FMR;
Treasurer of FMR, FMR
(U.K.) Inc., FMR (Far
East) Inc., and FIMM.

Richard R. Mace Jr. Vice President of FMR and
of funds advised by FMR.

Charles A. Mangum Vice President of FMR and
of a fund advised by FMR.

Kevin McCarey Vice President of FMR and
of a fund advised by FMR.

Diane M. McLaughlin Vice President of FMR.

Neal P. Miller Vice President of FMR.

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

Scott A. Orr Vice President of FMR and
of funds advised by FMR.

Jacques Perold Vice President of FMR.

Anne Punzak Vice President of FMR.

Kennedy P. Vice President of FMR.
Richardson

Eric D. Roiter Senior Vice President and
General Counsel of FMR and
Secretary of funds advised
by FMR.

Mark S. Rzepczynski Vice President of FMR.

Lee H. Sandwen Vice President of FMR.

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

Fergus Shiel Vice President of FMR.

Richard A. Silver Vice President of FMR.

Carol A. Vice President of FMR.
Smith-Fachetti

Steven J. Snider Vice President of FMR.

Thomas T. Soviero Vice President of FMR and
of a fund advised by FMR.

Richard Spillane Senior Vice President of
FMR; Associate Director
and Senior Vice President
of Equity funds advised by
FMR; Previously, Senior
Vice President and
Director of Operations and
Compliance of FMR (U.K.)
Inc.

Thomas M. Sprague Vice President of FMR and
of funds advised by FMR.

Robert E. Stansky Senior Vice President of
FMR and Vice President of
a fund advised by FMR.

Scott D. Stewart Vice President of FMR.

Cynthia L. Strauss Vice President of FMR.

Thomas Sweeney Vice President of FMR and
of a fund advised by FMR.

Beth F. Terrana Senior Vice President of
FMR and Vice President of
a fund advised by FMR.

Yoko Tilley Vice President of FMR.

Joel C. Tillinghast Vice President of FMR and
of a fund advised by FMR.

Robert Tuckett Vice President of FMR.

Jennifer Uhrig Vice President of FMR and
of funds advised by FMR.

George A. Senior Vice President of
Vanderheiden FMR and Vice President of
funds advised by FMR.

Steven S. Wymer Vice President of FMR and
of a fund advised by FMR.

(4) FIDELITY INVESTMENTS MONEY MANAGEMENT, INC. (FIMM)
Fidelity Investments Money Management, Inc. provides investment
advisory services to Fidelity Management & Research Company. The
directors and officers of the Sub-Adviser have held the following
positions of a substantial nature during the past two fiscal years.
Edward C. Chairman of the Board
Johnson 3d and Director of FIMM,
FMR, FMR Corp., FMR
(Far East) Inc., and
FMR (U.K.) Inc.;
Chairman of the Board
of FMR; President and
Chief Executive Officer
of FMR Corp.; Chairman
of the Board and
Representative Director
of Fidelity Investments
Japan Limited;
President and Trustee
of funds advised by
FMR.

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

Robert H. Auld Vice President of FIMM.

Robert K. Duby Vice President of FIMM
and of funds advised by
FMR.

Robert Vice President of FIMM
Litterst and of funds advised by
FMR.

Thomas D. Vice President of FIMM
Maher and Assistant Vice
President of Money
Market funds advised by
FMR.

Scott A. Orr Vice President of FIMM
and of funds advised by
FMR.

Burnell R. Vice President of FIMM
Stehman and of funds advised by
FMR.

John J. Todd Vice President of FIMM
and of funds advised by
FMR.

Mark G. Lohr Treasurer of FIMM, FMR
(U.K.) Inc., FMR (Far
East) Inc., and FMR;
Previously, Vice
President of FMR.

Stephen G. Assistant Treasurer of
Manning FIMM, FMR (U.K.) Inc.,
FMR (Far East) Inc.,
and FMR; Vice President
and Treasurer of FMR
Corp.

Jay Freedman Secretary of FIMM;
Clerk of FMR (U.K.)
Inc., FMR (Far East)
Inc., and FMR Corp.;
Assistant Clerk of FMR.

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

Name and Positions and Positions and
Principal Offices Offices

Business With Underwriter With Registrant
Address*

Edward C. Director Trustee and
Johnson 3d President

Michael Mlinac Director None

James Curvey Director None

Martha B. President None
Willis

Eric D. Roiter Senior Vice Secretary
President

Caron Ketchum Treasurer and None
Controller

Gary Assistant None
Greenstein Treasurer

Jay Freedman Assistant Clerk None

Linda Holland Compliance None
Officer

* 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 Company, Inc., 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
Not applicable.
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. 17 to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston, and Commonwealth of
Massachusetts, on the 16th day of March 1998.
FIDELITY NEW YORK MUNICIPAL TRUST II
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)

/s/Edward C. Johnson 3d (dagger) President and Trustee March 16, 1998

Edward C. Johnson 3d (Principal Executive
Officer)

/s/Richard A. Silver Treasurer March 16, 1998

Richard A. Silver

/s/Robert C. Pozen Trustee March 16, 1998

Robert C. Pozen

/s/Ralph F. Cox Trustee March 16, 1998
*

Ralph F. Cox

/s/Phyllis Burke Davis Trustee March 16, 1998
*

Phyllis Burke Davis

/s/Robert M. Gates Trustee March 16, 1998
**

Robert M. Gates

/s/E. Bradley Jones Trustee March 16, 1998
*

E. Bradley Jones

/s/Donald J. Kirk Trustee March 16, 1998
*

Donald J. Kirk

/s/Peter S. Lynch Trustee March 16, 1998
*

Peter S. Lynch

/s/Marvin L. Mann Trustee March 16, 1998
*

Marvin L. Mann

/s/William O. McCoy Trustee March 16, 1998
*

William O. McCoy

/s/Gerald C. McDonough * Trustee March 16, 1998

Gerald C. McDonough

/s/Thomas R. Williams Trustee March 16, 1998
*

Thomas R. Williams

(dagger) Signatures affixed by Robert C. Pozen pursuant to a power of
attorney dated July 17, 1997 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated December 19, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated March 6, 1997 and filed herewith.
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 Aberdeen Street Fidelity Hereford Street
Trust Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional Cash Portfolios
Fidelity Advisor Series III Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series IV Fidelity Investment Trust
Fidelity Advisor Series V Fidelity Magellan Fund
Fidelity Advisor Series VI Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series VII Fidelity Money Market Trust
Fidelity Advisor Series VIII Fidelity Mt. Vernon Street Trust
Fidelity Beacon Street Trust Fidelity Municipal Trust
Fidelity Boston Street Trust Fidelity Municipal Trust II
Fidelity California Municipal Trust Fidelity New York Municipal Trust
Fidelity California Municipal Trust II Fidelity New York Municipal Trust II
Fidelity Capital Trust Fidelity Phillips Street Trust
Fidelity Charles Street Trust Fidelity Puritan Trust
Fidelity Commonwealth Trust Fidelity Revere Street Trust
Fidelity Concord Street Trust Fidelity School Street Trust
Fidelity Congress Street Fund Fidelity Securities Fund
Fidelity Contrafund Fidelity Select Portfolios
Fidelity Corporate Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Court Street Trust Fidelity Summer Street Trust
Fidelity Court Street Trust II Fidelity Trend Fund
Fidelity Covington Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Daily Money Fund Fidelity U.S. Investments-Government Securities
Fidelity Destiny Portfolios Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity Union Street Trust II
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Newbury Street Trust
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
Fidelity Government Securities Fund Variable Insurance Products Fund III
Fidelity Hastings Street Trust

</TABLE>

in addition to any other investment company for which Fidelity
Management & Research Company or an affiliate acts as investment
adviser and for which the undersigned individual serves as President
and Director, Trustee, or General Partner (collectively, the "Funds"),
hereby constitute and appoint Robert C. Pozen my true and lawful
attorney-in-fact, with full power of substitution, and with full power
to him to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A, or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A, Form N-8A, or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such
things in my name and on my behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company
Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorney-in-fact or his substitutes may do or cause to be done by
virtue hereof. This power of attorney is effective for all documents
filed on or after August 1, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d_ July 17, 1997

Edward C. Johnson 3d

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 Aberdeen Street Fidelity Government
Trust Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II

</TABLE>

plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Directors, Trustees, or
General Partners (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, our true and lawful attorneys-in-fact,
with full power of substitution, and with full power to each of them,
to sign for us and in our names in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in our names
and behalf in connection therewith as said attorneys-in-fact deems
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after January
1, 1997.
WITNESS our hands on this nineteenth day of December, 1996.

/s/Edward C. Johnson /s/Peter S.
3d___________ Lynch________________

Edward C. Johnson 3d Peter S. Lynch

/s/J. Gary /s/William O.
Burkhead_______________ McCoy______________

J. Gary Burkhead William O. McCoy

/s/Ralph F. Cox /s/Gerald C.
__________________ McDonough___________

Ralph F. Cox Gerald C. McDonough

/s/Phyllis Burke /s/Marvin L.
Davis_____________ Mann________________

Phyllis Burke Davis Marvin L. Mann

/s/E. Bradley /s/Thomas R. Williams
Jones________________ ____________

E. Bradley Jones Thomas R. Williams

/s/Donald J. Kirk
__________________

Donald J. Kirk

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

</TABLE>

plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to
sign for me and in my name in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in my name
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 the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after March 1,
1997.
WITNESS my hand on the date set forth below.
/s/Robert M. Gates March 6, 1997

Robert M. Gates

Supplement To
Trust Instrument of
Fidelity New York Municipal Trust II
This Supplement to the Trust Instrument of Fidelity New York Municipal
Trust II, (the "Trust"), dated June 20, 1991, is adopted by the
Trustees pursuant to Article XI, Section 11.06, of the Trust and
incorporates all amendments to the Trust Instrument in effect as of
the date hereof as follows:
1. The Trust Instrument is amended by a resolution of the Trustees
adopted at a meeting on
September 14, 1995, by adding Section 7.04 as follows:
DERIVATIVE ACTIONS.
Section 7.04. Except as otherwise provided in Section 3816 of the
Delaware Act, all matters relating to the bringing of derivative
actions in the right of the Trust shall be governed by the General
Corporation Law of the State of Delaware relating to derivative
actions, and judicial interpretations thereunder, as if the Trust were
a Delaware corporation and the Shareholders were shareholders of a
Delaware corporation.
2. Section 11.05 of the Trust Instrument is amended and restated by a
resolution of the Trustees
adopted at a meeting on September 14, 1995, as follows:

MERGERS.
Section 11.05. (a) Notwithstanding anything else herein, the
Trustees, in order to change the form of organization of the Trust,
may, without prior Shareholder approval, (i) cause the Trust to merge
or consolidate with or into one or more trusts, partnerships (general
or limited), associations, limited liability companies or corporations
so long as the surviving or resulting entity is an open-end management
investment company under the 1940 Act, or is a Series thereof, that
will succeed to or assume the Trust's registration under that Act and
which is formed, organized or existing under the laws of a state,
commonwealth, possession or colony of the United States or (ii) cause
the Trust to incorporate under the laws of Delaware.
(b) The Trustees may, subject to a Majority Shareholder Vote of the
Trust, and subject to a vote of a majority of the Trustees, cause the
Trust to merge or consolidate with or into one or more trusts,
partnerships (general or limited), associations, limited liability
companies or corporations.
(c) Any agreement of merger or consolidation or certificate of
merger or consolidation may be signed by a majority of Trustees and
facsimile signatures conveyed by electronic or telecommunication means
shall be valid.
(d) Pursuant to and in accordance with the provisions of Section
3815 (f) of the Delaware Act, and notwithstanding anything to the
contrary contained in this Trust Instrument, an agreement of merger or
consolidation approved by the Trustees in accordance with paragraphs
(a) or (b) of this Section 11.05 may effect any amendment to the Trust
Instrument or effect the adoption of a new trust instrument of the
Trust if it is the surviving or resulting trust in the merger or
consolidation.
3. Section 10.01 of the Trust Instrument is amended and restated by a
resolution of the Trustees
adopted at a meeting on September 14, 1995, as follows:

LIMITATION OF LIABILITY.
Section 10.01. Neither a Trustee nor an officer of the Trust, when
acting in such capacity, shall be personally liable to any person
other than the Trust or a beneficial owner for any act, omission or
obligation of the Trust, any Trustee or any officer of the Trust.
Neither a Trustee nor an officer of the Trust shall be liable for any
act or omission or any conduct whatsoever in his capacity as Trustee
or as an officer of the Trust, provided that nothing contained herein
or in the Delaware Act shall protect any Trustee or any officer of the
Trust against any liability to the Trust or to Shareholders to which
he would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved
in the conduct of the office of Trustee or officer of the Trust
hereunder.
4. Section 11.02 is amended and restated by a resolution of the
Trustees adopted at a meeting on
September 14, 1995, as follows:

TRUSTEES' AND OFFICERS' GOOD FAITH ACTION, EXPERT ADVICE, NO BOND
OR SURETY.
Section 11.02. The exercise by the Trustees or the officers of the
Trust of their powers and discretions hereunder in good faith and with
reasonable care under the circumstances then prevailing shall be
binding upon everyone interested. Subject to the provisions of
Article X hereof and to Section 11.01 of this Article XI, the Trustees
and the officers of the Trust shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees and the officers of
the Trust may take advice of counsel or other experts with respect to
the meaning and operation of this Trust Instrument, and subject to the
provisions of Article X hereof and Section 11.01 of this Article XI,
shall be under no liability for any act or omission in accordance with
such advice or for failing to follow such advice. The Trustees and
the officers of the Trust shall not be required to give any bond as
such, nor any surety if a bond is obtained.
5. The second paragraph of Section 7.01 of the Trust Instrument is
amended and restated pursuant to a resolution of the shareholders
adopted at a meeting on March 24, 1997 as follows:
VOTING POWERS.
Section 7.01. ...On any matter submitted to a vote of the
Shareholders, all Shares shall be voted separately by individual
Series, except (i) when required by the 1940 Act, Shares shall be
voted in the aggregate and not by individual Series; and (ii) when the
Trustees have determined that the matter affects the interests of more
than one Series, then the Shareholders of all such Series shall be
entitled to vote thereon. The Trustees may also determine that a
matter affects only the interests of one or more classes of a Series,
in which case any such matter shall be voted on by such class or
classes. A Shareholder of each Series shall be entitled to one vote
for each dollar of net asset value (number of shares owned times net
asset value per share) of such Series, on any matter on which such
Shareholder is entitled to vote and each fractional dollar amount
shall be entitled to a proportionate fractional vote. There shall be
no cumulative voting in the election of Trustees. Shares may be voted
in person or by proxy, or in any manner provided for in the Bylaws. A
proxy may be given in writing. The Bylaws may provide that proxies
may also, or may instead, be given by any electronic or
telecommunications device or in any other manner. Notwithstanding
anything else herein or in the Bylaws, in the event a proposal by
anyone other than the officers or Trustees of the Trust is submitted
to a vote of the Shareholders of one or more Series or of the Trust,
or in the event of any proxy contest or proxy solicitation or proposal
in opposition to any proposal by the officers or Trustees of the
Trust, Shares may be voted only in person or by written proxy. Until
Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required or permitted by law,
this Trust Instrument or any Bylaws of the Trust to be taken by
Shareholders.
6. Section 4.01 of the Trust Instrument is amended by resolution of
the Trustees acting pursuant to the last sentence of Section 7.01
thereof and adopted by Unanimous Written Consent dated August 30,
1991, by redesignating subsections (w) and (x) as subsections (x) and
(y), respectively, and by adding new subsection (w) as follows:
(w) Notwithstanding any other provision hereof, to invest all of the
assets of any Series in a single open-end investment company,
including investment by means of transfer of such assets in exchange
for an interest or interests in such investment company;
7. Section 11.06 is amended by a resolution of the Trustees adopted at
a meeting on September 14,
1995 by adding after the first sentence the following:
A supplemental trust instrument executed by any one Trustee may be
relied upon as a Supplement hereof.
IN WITNESS WHEREOF, the undersigned, being a trustee of the Trust,
has executed this instrument.

/s/J. Gary Burkhead
J. Gary Burkhead, as Trustee
and not individually.
Dated: March 31, 1997

MANAGEMENT CONTRACT
between
FIDELITY NEW YORK MUNICIPAL TRUST II:
FIDELITY NEW YORK MUNICIPAL MONEY MARKET FUND
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT AMENDED and RESTATED as of this 1st day of April 1997, by
and between Fidelity New York Municipal Trust II, a Delaware business
trust which may issue one or more series of shares of beneficial
interest (hereinafter called the "Fund"), on behalf of Fidelity New
York Municipal Money Market Fund (hereinafter called the "Portfolio"),
and Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Adviser") as set forth in its
entirety below.
1. (a) Investment Advisory Services. The Adviser undertakes to act
as investment adviser of the Portfolio and shall, subject to the
supervision of the Fund's Board of Trustees, direct the investments of
the Portfolio in accordance with the investment objective, policies
and limitations as provided in the Portfolio's Prospectus or other
governing instruments, as amended from time to time, the Investment
Company Act of 1940 and rules thereunder, as amended from time to time
(the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also
furnish for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the
investments of the Portfolio; and shall pay the salaries and fees of
all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to
research, statistical and investment activities. The Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio, to buy, sell, lend and otherwise trade in any stocks, bonds
and other securities and investment instruments on behalf of the
Portfolio. The investment policies and all other actions of the
Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and
administrative services necessary for the operation of the Fund. The
Adviser shall, subject to the supervision of the Board of Trustees,
perform various services for the Portfolio, including but not limited
to: (i) providing the Portfolio with office space, equipment and
facilities (which may be its own) for maintaining its organization;
(ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and
pricing agents, accountants, attorneys, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be
necessary or desirable; (iii) preparing all general shareholder
communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered,
maintaining the registration and qualification of the Portfolio's
shares under federal and state law; and (vii) investigating the
development of and developing and implementing, if appropriate,
management and shareholder services designed to enhance the value or
convenience of the Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information
or analyses to the Fund as the Fund's Board of Trustees may request
from time to time or as the Adviser may deem to be desirable. The
Adviser shall make recommendations to the Fund's Board of Trustees
with respect to Fund policies, and shall carry out such policies as
are adopted by the Trustees. The Adviser shall, subject to review by
the Board of Trustees, furnish such other services as the Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the Adviser, which may include brokers or dealers
affiliated with the Adviser. The Adviser shall use its best efforts
to seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers
or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other
accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to
the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. The Trustees of the Fund shall
periodically review the commissions paid by the Portfolio to determine
if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor.
The Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of
the Fund are or may be or become interested in the Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser are or may be or become similarly
interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Adviser shall
receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Group Fee
and an Individual Fund Fee.
(a) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment
companies having Advisory and Service or Management Contracts with the
Adviser (computed in the manner set forth in the fund's Declaration of
Trust or other organizational document) determined as of the close of
business on each business day throughout the month. The Group Fee
Rate shall be determined on a cumulative basis pursuant to the
following schedule:
Average Net Annualized Fee Rate (for each level)
Assets

0 - $ 3 .3700%
billion

3 - 6 .3400

6 - 9 .3100

9 - 12 .2800

12 - 15 .2500

15 - 18 .2200

18 - 21 .2000

21 - 24 .1900

24 - 30 .1800

30 - 36 .1750

36 - 42 .1700

42 - 48 .1650

48 - 66 .1600

66 - 84 .1550

84 - 120 .1500

120 - 156 .1450

156 - 192 .1400

192 - 228 .1350

228 - 264 .1300

264 - 300 .1275

300 - 336 .1250

336 - 372 .1225

372 - 408 .1200

408 - 444 .1175

444 - 480 .1150

480 - 516 .1125

Over - 516 .1100

(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be
.25%.
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute
the Annual Management Fee Rate. One-twelfth of the Annual Management
Fee Rate shall be applied to the average of the net assets of the
Portfolio (computed in the manner set forth in the Fund's Declaration
of Trust or other organizational document) determined as of the close
of business on each business day throughout the month.
4. It is understood that the Portfolio will pay all its expenses,
which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase or sale of securities and
other investment instruments; (iii) fees and expenses of the Fund's
Trustees other than those who are "interested persons" of the Fund or
the Adviser; (iv) legal and audit expenses; (v) custodian, registrar
and transfer agent fees and expenses; (vi) fees and expenses related
to the registration and qualification of the Fund and the Portfolio's
shares for distribution under state and federal securities laws; (vii)
expenses of printing and mailing reports and notices and proxy
material to shareholders of the Portfolio; (viii) all other expenses
incidental to holding meetings of the Portfolio's shareholders,
including proxy solicitations therefor; (ix) a pro rata share, based
on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management
Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing
Prospectuses and Statements of Additional Information and supplements
thereto; (xii) expenses of printing and mailing Prospectuses and
Statements of Additional Information and supplements thereto sent to
existing shareholders; and (xiii) such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or
proceedings to which the Portfolio is a party and the legal obligation
which the Portfolio may have to indemnify the Fund's Trustees and
officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and
engage in other activities, provided, however, that such other
services and activities do not, during the term of this Contract,
interfere, in a material manner, with the Adviser's ability to meet
all of its obligations with respect to rendering services to the
Portfolio hereunder. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Adviser, the Adviser shall not be subject
to liability to the Portfolio or to any shareholder of the Portfolio
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security or other investment
instrument.
6. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 6, this Contract shall continue in force until May
31, 1997 and indefinitely thereafter, but only so long as the
continuance after such date shall be specifically approved at least
annually by vote of the Trustees of the Fund or by vote of a majority
of the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on
the part of the Fund to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the terms of any continuance or modification of this
Contract must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to the Contract or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment
of any penalty, by action of its Trustees or Board of Directors, as
the case may be, or with respect to the Portfolio by vote of a
majority of the outstanding voting securities of the Portfolio. This
Contract shall terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust
or other organizational document and agrees that the obligations
assumed by the Fund pursuant to this Contract shall be limited in all
cases to the Portfolio and its assets, and the Adviser shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio or any other Portfolios of the Fund. In
addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Declaration of Trust or other organizational document are separate and
distinct from those of any and all other Portfolios.
8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.

The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, as now in effect or
as hereafter amended, and subject to such orders as may be granted by
the Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
FIDELITY NEW YORK MUNICIPAL TRUST II
on behalf of Fidelity New York Municipal Money Market Fund
By /s/J. Gary Burkhead
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/J. Gary Burkhead
President

CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the
Prospectus and Statement of Additional Information in Post-Effective
Amendment No. 17 to the Registration Statement on Form N-1A of
Fidelity New York Municipal Trust II: Fidelity New York Municipal
Money Market Fund and Spartan New York Municipal Money Market Fund ,
of our reports dated March 5, 1998 on the financial statements and
financial highlights included in the January 31, 1998 Annual Report to
Shareholders of Fidelity New York Municipal Money Market Fund and
Spartan New York Municipal Money Market Fund.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Auditor" in the
Statement of Additional Information.
/s/Price Waterhouse LLP
Price Waterhouse LLP
Boston, Massachusetts
March 16, 1998

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