FIDELITY MUNICIPAL TRUST II, 485BPOS, 2000-02-24

FIDELITY MUNICIPAL TRUST II
485BPOS, 2000-02-24

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT No. 33-43986
UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 21 [X]

and

REGISTRATION STATEMENT No. 811-6454
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 21 [X]

Fidelity 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 February 28, 2000 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.

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

FIDELITY'S
MICHIGAN MUNICIPAL
FUNDS

FIDELITY(REGISTERED TRADEMARK) MICHIGAN MUNICIPAL MONEY MARKET FUND
(fund number 420, trading symbol FMIXX)

SPARTAN(REGISTERED TRADEMARK) MICHIGAN MUNICIPAL INCOME FUND
(fund number 081, trading symbol FMHTX)

PROSPECTUS
FEBRUARY 28, 2000

(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109

CONTENTS

FUND SUMMARY 2 INVESTMENT SUMMARY

3 PERFORMANCE

5 FEE TABLE

FUND BASICS 6 INVESTMENT DETAILS

8 VALUING SHARES

SHAREHOLDER INFORMATION 8 BUYING AND SELLING SHARES

15 EXCHANGING SHARES

15 ACCOUNT FEATURES AND POLICIES

18 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS

18 TAX CONSEQUENCES

FUND SERVICES 19 FUND MANAGEMENT

19 FUND DISTRIBUTION

APPENDIX 20 FINANCIAL HIGHLIGHTS

FUND SUMMARY

INVESTMENT SUMMARY

INVESTMENT OBJECTIVE

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

PRINCIPAL INVESTMENT STRATEGIES

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

(small solid bullet) Normally inv esting in municipal money
market securities, including s hares of a municipal money market
fund managed by an affiliate of FMR.

(small solid bullet) Nor mally inves ting so that at least 80% of
the fund's income distributions is exempt from federal and Michigan
income taxes.

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

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

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

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

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

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

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

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

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

INVESTMENT OBJECTIVE

SPARTAN MICHIGAN MUNICIPAL INCOME FUND seeks a high level of current
income exempt from federal income tax and Michigan personal income
tax. The fund also seeks income exempt from certain business or
corporate taxes.

PRINCIPAL INVESTMENT STRATEGIES

FMR's principal investment strategies include:

(small solid bullet) Norm ally investing in investment-grade
mun icipal debt securities (those of medium an d high quality).

(small solid bullet) Norm ally in vesting at least 80% of assets
in securities exempt from federal and Michigan personal income taxes.

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

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

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

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

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

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

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

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

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

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

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

PERFORMANCE

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

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEAR-BY-YEAR RETURNS

MI MUNICIPAL MONEY MARKET

Calendar Years 1991 1992 1993 1994 1995 1996 1997 1998 1999

4.46% 2.66% 1.98% 2.44% 3.38% 3.00% 3.18% 3.00% 2.82%

</TABLE>

Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: 4.46
Row: 3, Col: 1, Value: 2.66
Row: 4, Col: 1, Value: 1.98
Row: 5, Col: 1, Value: 2.44
Row: 6, Col: 1, Value: 3.38
Row: 7, Col: 1, Value: 3.0
Row: 8, Col: 1, Value: 3.18
Row: 9, Col: 1, Value: 3.0
Row: 10, Col: 1, Value: 2.82

DURING TH E PERIODS SHOWN IN THE CHART FOR MICHIGAN MUNICIPAL MONEY
MARKET, THE HIGHEST RETURN FOR A QUARTER WAS 1.18% (QUARTER ENDED
MARCH 31, 1991) AND THE LOWEST RETURN FOR A QUARTER WAS 0.48%
(QUARTER ENDED MARCH 31, 1994).

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

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

5.15% 12.04% 9.54% 13.83% -7.50% 15.41% 3.38% 9.02% 5.71% -2.63%

</TABLE>

Percentage (%)
Row: 1, Col: 1, Value: 5.15
Row: 2, Col: 1, Value: 12.04
Row: 3, Col: 1, Value: 9.539999999999999
Row: 4, Col: 1, Value: 13.83
Row: 5, Col: 1, Value: -7.5
Row: 6, Col: 1, Value: 15.41
Row: 7, Col: 1, Value: 3.38
Row: 8, Col: 1, Value: 9.02
Row: 9, Col: 1, Value: 5.71
Row: 10, Col: 1, Value: -2.63

DURING THE PERIODS SHOWN IN THE CHART FOR SPARTAN MICHIGAN
MUNICIPAL INCOME, THE HIGHEST RETURN FOR A QUARTER WAS 5.10% (QUARTER
ENDED MARCH 31, 1995) AND THE LOWEST RETURN FOR A QUARTER WAS -6.02%
(QUARTER ENDED MARCH 31, 1994).

<TABLE>
<CAPTION>
<S> <C> <C> <C>
AVERAGE ANNUAL RETURNS

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

Michigan Municipal Money Market 2.82% 3.07% 3.26%A

Spartan Michigan Municipal -2.63% 6.01% 6.17%
Income

Lehman Brothers Municipal -2.06% 6.91% 6.89%
Bond Index

Lehman Brothers Michigan -2.28% 7.10% n/a
Municipal Bond Index

Lipper Michigan Municipal -4.05% 5.74% 6.24%
Debt Funds Average

</TABLE>

A FROM J ANUARY 12, 19 90.

If FMR had not reimbursed certain fund expenses during these
periods, each fund's returns would have been low er.

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

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

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

FEE TABLE

The following table describes the fees and expenses that are incurred
when you buy, ho ld, or sell shares of a fund. The annual
fund operating expenses provided below for each fund are based on
historical expenses.

SHAREHOLDER FE ES (PAID BY THE INVESTOR DIRECTLY)

Sales charge (load) on None
purchases and reinvested
distributions

Deferred sales charge (load) None
on redemptions

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

ANNUAL FUND OPERATING EXPENSES (PAID FROM FUND ASSETS)

MI MUNICIPAL MONEY MARKET Management fee 0.38%

Distribution and Service None
(12b-1) fee

Other expenses 0.20%

Total annual fund operating 0.58%
expenses

SPARTAN MI MUNICIPAL INCOME Management fee 0.38%

Distribution and Service None
(12b-1) fee

Other expenses 0.14%

Total annual fund operating 0.52%
expensesA

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

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

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

MI MUNICIPAL MONEY MARKET 1 year $ 59

3 years $ 186

5 years $ 324

10 years $ 726

SPARTAN MI MUNICIPAL INCOME 1 year $ 53

3 years $ 167

5 years $ 291

10 years $ 653

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE

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

PRINCIPAL INVESTMENT STRATEGIES

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

FMR normally invests the fund's assets so that at least 80% of the
fund's income distributions is exempt from federal and Michigan income
taxes. Municipal securities whose interest is exempt from federal and
Michigan income taxes include securities issued by U.S. territories
and possessions, such as Guam, the Virgin Islan ds, a nd Puerto
Rico, and their political subdivisions and public corporations.

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

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

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

INVESTMENT OBJECTIVE

PRINCIPAL INVESTMENT STRATEGIES

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

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

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

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

FMR uses the Lehman Brothers Michigan Municipal Bond Index as a guide
in structuring the fund and selecting its investments. FMR manages the
fund to have similar overall interest rate risk to the index. As of
December 31, 1 999, the dollar-weighted average maturity of the
fund and the index was approximately 13.7 and 14.8 ye ars,
respectively.

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

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

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

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

DESCRIPTION OF PRINCIPAL SECURITY TYPES

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

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

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

PRINCIPAL INVESTMENT RISKS

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

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

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

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

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

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

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

GEOGRAPHIC CONCENTRATION. Michigan's economy is dominated by
automobile-related industries, which tend to be especially vulnerable
to economic downturns. Historically the state's unemployment rate has
been higher than average, although this has not been the case since
1994. In addition, betw een 1993 and 1995, there were
signifi cant constitutional and statutory changes to Michigan's
taxatio n and school financing structures, which could affect
the financial health of the state and its local units.

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

In response to market, economic, politic al, o r other
conditions, FMR may temporarily use a different investment strategy
for defensive purposes. If FMR does so, different factors could affect
a fund's performance, and a fund c ould distribute income
subject to federal or Michigan income tax.

FUNDAMENTAL INVESTMENT POLICIES

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

MICHIGAN MUNICIPAL MONEY MARKET FUND seeks as high a level of current
income, exempt from federal income tax and Michigan personal income
tax, as is consistent with the preservation of capital. The fund will
normally invest so that at least 80% of its income distributions are
exempt from federal and state income tax.

SPARTAN MICHIGAN MUNICIPAL INCOME FUND seeks a high level of current
income exempt from federal income tax and Michigan personal income tax
by investing primarily in investment-grade municipal bonds. The fund
also seeks income exempt from certain business or corporate taxes.

VALUING SHARES

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

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

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

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

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

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

GENERAL INFORMATION

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

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

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

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

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

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

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

(small solid bullet) For r etirement information,
1-800-544-47 74.

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

Please use the following addresses:

BUYING SHARES

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

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

SELLING SHARES

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

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

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

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

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

WAYS TO SET UP YOUR ACCOUNT

INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS

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

TRUST
FOR MONEY BEING INVESTED BY A TRUST

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

BUYING SHARES

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

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

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

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

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

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

(small solid bullet) Fidelity does not accept cash.

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

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

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

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

MINIMUMS

TO OPEN AN ACCOUNT

Michigan Municipal Money Market $5,000

Spartan Michigan Municipal Income $10,000

TO ADD TO AN ACCOUNT

Michigan Municipal Money Market $500

Through regular investment plans $100

Spartan Michigan Municipal Income $1,000

Through regular investment plans $500

MINIMUM BALANCE

Michigan Municipal Money Market $2,000

Spartan Michigan Municipal Income $5,000

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

KEY INFORMATION

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

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

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

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

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

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

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

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

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

TO ADD TO AN ACCOUNT
(small solid bullet) Wire to:
Bankers Trust Company, Bank
Routing # 021001033, Account
# 00163053.
(small solid bullet) Specify
the complete name of the
fund and include your fund
account number and your name.

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

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

SELLING SHARES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

KEY INFORMATION

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

AUTOMATICALLY (small solid bullet) Use
Fidelity Automatic Exchange
Service to exchange from the
money market fund to another
Fidelity fund.

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

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

EXCHANGING SHARES

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

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

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

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

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

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

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

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

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

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

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

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

ACCOUNT FEATURES AND POLICIES

FEATURES

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

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

FIDELITY AUTOMATIC ACCOUNT
BUILDER TO MOVE MONEY FROM
YOUR BANK ACCOUNT TO A
FIDELITY FUND.

MINIMUM FREQUENCY PROCEDURES
Michigan Municipal Money Monthly or quarterly (small solid bullet) To set
Market $100 up for a new account,
Spartan Michigan Municipal complete the appropriate
Income $500 section on the fund
application.

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

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

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

MINIMUM FREQUENCY PROCEDURES
Michigan Municipal Money Every pay period (small solid bullet) To set
Market $100 up for a new account, check
Spartan Michigan Municipal the appropriate box on the
Income $500 fund application.

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

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

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

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

MINIMUM FREQUENCY PROCEDURES
Michigan Municipal Money Monthly, bimonthly, (small solid bullet) To set
Market $100 quarterly, or annually up, call 1-800-544-6666
Spartan Michigan Municipal after both accounts are
Income $500 opened.

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

</TABLE>

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

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

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

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

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

(small solid bullet) You must sign up for the Wire feature before
using it. Complete the appropriate section on the application when
ope ning your account, or call 1-800-544-6666 to add the feature
after your account is opened. Call 1-800-544-666 6 before your
first use to verify that this feature is set up on your account.

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

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

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

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

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

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

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

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

(small solid bullet) For account balances and holdings;

(small solid bullet) To review recent account history;

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

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

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

(small solid bullet) For account balances and holdings;

(small solid bullet) To review recent account history;

(small solid bullet) To obtain quotes;

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

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

F AST
TO ACCESS AND MANAGE YOUR ACCOUNT AUTOMATIC ALLY BY PHONE USING
TOUCH TONE OR SPEECH RECOGNITION.

CALL 1-800-544-5555.

(small solid bullet) For account balances and holdings;

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

(small solid bullet) To obtain quotes;

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

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

CHECKWRITING
TO REDEEM SHARES FROM YOUR ACCOUNT.

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

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

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

(small solid bullet) Mi nimum check amount: $500 for Michigan
Municipal Money Market and $1,000 for Spartan Michigan Municipal
Income .

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

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

POLICIES

The following policies apply to you as a shareholder.

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

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

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

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

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

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

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

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

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

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

Fidelity m ay c harge a FEE FOR CERTAIN SERVICES, s uch as
pro viding historical a ccount docu ments.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

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

The bond fund normally declares dividends daily and pays them monthly.
The bond fund normally pays capital gain distributions in February
and Dec ember.

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

EARNING DIVIDENDS

Shares begin to earn dividends on the first business day following the
day of purchase.

Shares earn dividends until, but not including, the next business day
following the day of redemption.

DISTRIBUTION OPTIONS

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

1. REINVESTMENT OPTION. Your dividends and capital gain
distr ibutions, 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 capita l gain
dist ributions will be automatically reinvested in additional
shares of the fund. Your dividends will be paid in cash.

3. CASH OPTION. Your dividends and capital g ain distrib utions,
if any, will be paid in cash.

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

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

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

TAX CONSEQUENCES

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

TAXES ON DISTRIBUTIONS. Michigan Municipal Money Market seeks to
earn income and pay dividends exempt from federal income tax and
Michigan personal income tax.

Spartan Michigan Municipal Income seeks to earn income and pay
dividends exempt from federal income tax, Michigan personal income
tax, and certain business or corporate tax es in Michigan.

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

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

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

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

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

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

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

FUND SERVICES

FUND MANAGEMENT

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

FMR is each fund's manager.

As of March 25, 1999 , FMR had approximately $521.7 bill ion in
discretionary assets under management.

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

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

FIMM is an affiliate of FMR. As of March 29, 1999 , FIMM had
approximately $159.8 billion in discretionary assets under
management.

Norm Lind is vi ce president an d manager of Spartan Michigan
Municipal Income, which he has managed since January 1998. He also
manages several other Fidelity funds. Since joining Fidelity in 1986,
Mr. Lind has worked as an analyst and manager.

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

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

Each fund pays a management fee to FMR. The management fee is
calculated and paid to FMR eve ry month. The fee is calculated by
adding a group fee rate to an individual fund fee rate, dividing by
twelve, and multiplying the result by the fund's average net assets
throughout the month.

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

For December 1999 , the group fee rate was 0.1267% f or Michigan
Municipal Money Market and Spartan Michigan Municipal Income. The
individual fund fee rate i s 0.25% for Michigan Municipal Money
Market and Spartan Michigan Municipal Income.

The total management fee for the fiscal year ended December 31,
1999, was 0.38% of the fund's average net assets for Michigan
Municipal Money Market and 0.38% of the f und's average net assets
for Spartan Michigan Municipal Income.

FMR pays FIMM for providing sub -advisory services.

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

FUND DISTRIBUTION

FDC distributes each fund's shares.

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

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

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

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

APPENDIX

FINANCIAL HIGHLIGHTS

The financial highlights tables are intended to help you understand
each fund's financial history for the past 5 years. Certain
information reflects financial results for a single fund share. The
total returns in the table represent the rate that an investor would
have earned (or los t) on an investment in the f und
(assumin g reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP ,
independent accountants, whose report, along with each fund's
financial highlights and financial statements, are included in e ach
fund's annual report. A free copy of the an nual report is
available upon request.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND

Years ended December 31, 1999 1998 1997 1996 1995

SELECTED PER-SHARE DATA

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

Income from Investment
Operations

Net interest income .028 .030 .031 .030 .033

Less Distributions

From net interest income (.028) (.030) (.031) (.030) (.033)

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

TOTAL RETURN A 2.82% 3.00% 3.18% 3.00% 3.38%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 444,679 $ 357,354 $ 287,940 $ 260,592 $ 231,259
(000 omitted)

Ratio of expenses to average .58% .60% .61% .62% .63%
net assets

Ratio of expenses to average .58% .59% B .61% .61% B .63%
net assets after expense
reductions

Ratio of net interest income 2.80% 2.97% 3.14% 2.96% 3.32%
to average net assets

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S
EXPENSES.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SPARTAN MICHIGAN MUNICIPAL INCOME FUND

Years ended December 31, 1999 1998 1997 1996 1995

SELECTED PER-SHARE DATA

Net asset value, beginning of $ 11.720 $ 11.630 $ 11.300 $ 11.560 $ 10.580
period

Income from Investment
Operations

Net interest income .551 .557 .571 .630 C .611

Net realized and unrealized (.850) .093 .420 (.258) .980
gain (loss)

Total from investment (.299) .650 .991 .372 1.591
operations

Less Distributions

From net interest income (.551) (.557) (.571) (.630) (.611)

In excess of net interest - (.003) - (.002) -
income

In excess of net realized - - (.090) - -
gain

Total distributions (.551) (.560) (.661) (.632) (.611)

Net asset value, end of period $ 10.870 $ 11.720 $ 11.630 $ 11.300 $ 11.560

TOTAL RETURN A (2.63%) 5.71% 9.02% 3.38% 15.41%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 425,130 $ 479,935 $ 457,932 $ 455,729 $ 491,874
(000 omitted)

Ratio of expenses to average .52% .55% B .56% B .59% .59%
net assets

Ratio of net interest income 4.86% 4.77% 5.08% 5.52% 5.49%
to average net assets

Portfolio turnover rate 19% 24% 16% 29% 29%

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B 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.
C NET INTEREST INCOME PER SHARE REFLECTS A PAYMENT OF APPROXIMATELY
$0.049 RECEIVED FROM AN ISSUER THAT WAS IN BANKRUPTCY.

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

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

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

INVESTMENT COMPANY ACT OF 1940, FILE NUMBERS 811-2720 AND 811-6454.

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

FAST a nd Portfolio Advisory Services are service marks of FMR
Cor p.

1.540180.102 MIS/MIF-pro- 0200

FIDE LITY (registered trademark) MICHIGAN MUNICIPAL MONEY MARKET
FUND
A FUND OF FIDELITY MUNICIPAL TRUST II
SPARTAN(registered trademark) MICHIGAN MUNICIPAL INCOME FUND
A FUND OF FIDELITY MUNICIPAL TRUST
STATEMENT OF ADDITIONAL INFORMATION
FEBRUA RY 28, 2000

T his statement of additional information (SAI) is not a prospectus.
Portions of each fund's annual report are incorporated herein. The
annual reports are supplied with this SAI.

To obtain a free additional copy of the prospectus, dated February
28, 2000, or an annual report, please call Fidelity at
1-800-544-8544 or visit Fidelity's Web site at www.fidelity.com.

TABLE OF CONTENTS PAGE

Investment Policies and 20
Limitations

Special Considerations 25
Regarding Michigan

Special Considerations 27
Regarding Puerto Rico

Portfolio Transactions 30

Valuation 31

Performance 31

Additional Purchase, Exchange 41
and Redemption Information

Distributions and Taxes 41

Trustees and Officers 41

Control of Investment Advisers 43

Management Contracts 44

Distribution Services 48

Transfer and Service Agent 49
Agreements

Description of the Trusts 49

Financial Statements 50

Appendix 50

MIS/MIF-ptb- 0200
1.540390.102

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

INVESTMENT POLICIES AND LIMITATIONS

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

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

INVESTMENT LIMITATIONS OF MICHIGAN MUNICIPAL M ONEY MARK ET FUND

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

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

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

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

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

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

(6) underwrite 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);

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

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

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

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

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

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

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

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

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

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

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

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

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

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

INVESTMENT LIMITATIONS OF SPARTAN MICHIGAN MUNICIPAL I NCOM E
FUND

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

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

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

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

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

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

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

(7) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements, 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-ended 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 sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.

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

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

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

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

(vii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.

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

For purposes of limitation (i), Subchapter M generally requires the
fund to invest no more than 25% of its total assets in securities of
any one issuer and to invest at least 50% of its 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.

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 w ere in vested in illiquid
securities, it would consider appropriate steps to protect liquidity.

For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 37.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SPECIAL CONSIDERATIONS REGARDING MICHIGAN

The following only highlights some of Michigan's more significant
financial trends and problems, and is based on information drawn from
official statements and prospectuses relating to securities offerings
of the State of Michigan, its agencies and instrumentalities as
available on December 31, 1999 . FMR has not independently
verified any of the information contained in such official statements
and other publicly available documents, but is not aware of any fact
that would render such information inaccurate.

CONSTITUTIONAL STATE REVENUE LIMITATIONS. In 1978 the State
Constitution was amended to limit the amount of total State revenues
raised from taxes and other sources. State revenues (excluding federal
aid and revenues for payment of principal and interest on general
obligation bonds) in any fiscal year are limited to a fixed percentage
of State personal income in the prior calendar year or average of the
prior three calendar years, whichever is greater. The percentage is
fixed by the amendment to equal the ratio of the 1978-79 fiscal year
revenues to total 1977 State personal income.

If any fiscal year revenues exceed the revenue limitation by one
percent or more, the entire amount of such excess shall be rebated in
the following fiscal year's personal income tax or single business
tax. Any excess of less than one percent may be transferred to the
State's Budget Stabilization Fund.

The State may raise taxes in excess of the limit for emergencies when
deemed necessary by the Governor and two-thirds of the members of each
house of the Legislature.

The State Constitution provides that the proportion of State spending
paid to all units of local government to total State spending may not
be reduced below the proportion in effect in the 1978-79 fiscal year.
The percentage, originally determined for the base year 1978-79 at
41.6 % , was recalculated effective with the fiscal year
1992-93 as a result of a legal settlement with Oakland
County, Michigan . As part of the settlement, the State agreed
to recalculate the base year determination to ensure a consistent base
of expenditures to local units of government. The recalculated base
year percentage is 48.97%. If such spending does not meet the
required level in a given year, an additional appropriation for local
governmental units is required by the "following fiscal year," which
means the year following the determination of the shortfall, according
to an opinion issued by the State's Attorney General. Spending for
local units met this requirement for fiscal years 1990-91 through
1995-96.

The State Constitution also requires the State to finance any new or
expanded activity of local governments mandated by State law. Any
expenditures required by this provision would be counted as State
spending for local units of government for purposes of determining
compliance with the provision cited above.

CONSTITUTIONAL LOCAL TAX LIMITATIONS. Under the Michigan Constitution,
the total amount of general ad valorem taxes imposed on taxable
property in any year cannot exceed certain millage limitations
specified by the Constitution, statute or charter. The Constitution
was amended by popular vote in November 1978 (effective December 23,
1978) to prohibit local units of government from levying any tax not
authorized by law or charter, or from increasing the rate of an
existing tax above the rate authorized by law or charter, at the time
the amendments were ratified, without the approval of a majority of
the electors of the local unit voting on the question.

Local units of government and local authorities are authorized to
issue bonds and other evidences of indebtedness in a variety of
situations without the approval of electors, but the ability of the
obliger to levy taxes for the payment of such obligations is
subject to the foregoing limitations unless the obligations were
authorized before December 23, 1978 or approved by the electors.

The 1978 amendments to the Constitution also contain millage reduction
provisions. Under such provisions, should the value of taxable
property (exclusive of new construction and improvements) increase at
a percentage greater than the percentage increase in the Consumer
Price Index, the maximum authorized tax rate would be reduced by a
factor which would result in the same maximum potential tax revenues
to the local taxing unit as if the valuation of taxable property (less
new construction and improvements) had grown only at the Consumer
Price Index rate instead of at the higher actual growth rate. Thus, if
taxable property values rise faster than consumer prices, the maximum
authorized tax rate would be reduced accordingly.

MICHIGAN SCHOOL FINANCE AND PROPERTY TAX CHANGES. On March
15, 1994, the people of the State of Michigan approved an amendment to
the State Constitution (the "Constitutional Amendment") which resulted
in reduced local property taxes. The Constitutional Amendment
increased the state sales and use tax from 4% to 6%; limits the
ability of local school districts to levy taxes; and limits assessment
increases for each parcel of property to the lesser of 5% or the rate
of inflation. When property is subsequently sold, its taxable value
will revert to the current assessment level of 50% of true cash
value.

The Constitutional Amendment, together with legislation enacted in
conjunction with the Constitutional Amendment, has substantially
increased the revenues dedicated to the State's school aid fund.
Pursuant to the Constitutional Amendment, the State's school aid fund
directly receives (i) 60% of all taxes imposed at a rate of 4% on
retailers on taxable sales at retail of tangible personal property and
(ii) 100% of the proceeds of the sales and use taxes imposed at the
additional rate of 2%. Pursuant to companion legislation, the State's
school aid fund directly receives (i) all of the proceeds generated
from the tax levied on cigars, noncigarette smoking tobacco and
smokeless tobacco at a rate of 16% of the wholesale price thereof,
(ii) 63.4% of the proceeds generated by the tax levied on cigarettes
at the rate of 3.75 cents per cigarette (75(cents) per pack), (iii)
all of the proceeds generated by the .75% real estate transfer tax,
(iv) the profits of the state-operated lottery, (v) a portion of the
commercial and industrial facilities taxes imposed pursuant to the
Commercial Redevelopment Act, Act No. 255, Public Acts of Michigan,
1978, as amended, and Act No. 198, Public Acts of Michigan, 1974, as
amended, respectively, which would otherwise be disbursed to local
school districts and which compensates the State for increased State
Aid to certain intermediate school districts affected by the property
tax abatements authorized under those Acts, (vi) the State's 4% liquor
excise tax, (vii) the State's education tax levied at a rate of six
mills on all property not exempt by law from ad valorem property taxes
or not subject to a tax levied upon certain rail transportation,
telephone and telegraph companies and (viii) 23.0% of the gross
collections before refunds from the State income tax levied at a rate
of 4.4%.

In conjunction with the Constitutional Amendment, the State
Legislature also enacted legislation which substantially reduces the
maximum rate at which ad valorem property taxes can be levied by local
school districts for school operating purposes. Except for certain
levies authorized as described in the two paragraphs below, each local
school district shall levy no more than 18 mills for school operating
purposes or the number of mills it levied in 1993 for school operating
purposes, whichever is less. All homestead property and qualified
agricultural property as defined by State law is exempt from such
levy, except for certain limited exceptions. The legislation also
established a system of financing local school operating costs based
on a foundation allowance amount which may vary by district based upon
historical spending levels. State funding will provide each school
district an amount equal to the difference between its foundation
allowance and the revenue that would be generated by the levy of
certain local property taxes for school operating purposes at
specified maximum authorized rates. A local school district is
entitled to levy supplemental property taxes to generate additional
revenues if its foundation allowance is less than its historical per
pupil expenditures. Levies of a limited number of enhancement mills on
regional and local school district bases are also allowed.

The effect of the Constitutional Amendment and the companion
legislation is that a significant portion of the cost of local school
operations have been shifted from local school districts to the State.
The legislation provided for additional State revenues to fund these
State expenses. These additional revenues will be included with the
State's constitutional revenue limitations and may impact the State's
ability to raise additional revenues in the future.

EFFECT OF LIMITATIONS ON ABILITY TO PAY BONDS. The ability of the
State of Michigan to pay the principal and interest on its general
obligation bonds may be affected by the limitations described above
under "Constitutional State Revenue Limitations" and "Michigan
School Fina nce and Property Tax Changes." Similarly, the ability
of local units of government to levy taxes to pay the principal and
interest on their general obligation bonds is subject to the
constitutional, statutory, and charter limitations described above
under "Constitutional Local Tax Limitations" and "Michigan School
Fi nance and Property Tax Changes."

In general, revenue bonds issued by the State, by local units of
government, or by authorities created by the State or local units of
government are payable solely from such specified revenues (other than
tax revenues) as are pledged for that purpose, and such authorities
generally have no taxing power.

EFFECT OF GENERAL ECONOMIC CONDITIONS IN MICHIGAN. Michigan is an
industrialized state, whose economy is dominated by the automobile
industry and related industries. It tends to be more vulnerable to
economic downturns than the other economies of many other
states and the nation as a whole. Tourism and agriculture are two
other important, but less significant industries in the State, both of
which have been affected adversely by prior recessions.

Over the past fifteen years the Michigan unemployment rate typically
has been higher than the national rate, however, this has not been the
case since 1994. The State's seasonally adjusted November 30, 1998
unemployment rate was 3.6% compared to the seasonally adjusted
national rate of 4.4%. The table below shows the State and national
unemployment rates published by the Michigan Employment Security
Commission and the U.S. Bureau of Labor Statistics, respectively, for
the years indicated.

Period Michigan United States

1984 11.2% 7.4%

1985 9.9% 7.1%

1986 8.8% 6.9%

1987 8.2% 6.1%

1988 7.6% 5.5%

1989 7.1% 5.3%

1990 7.6% 5.5%

1991 9.3% 6.7%

1992 8.9% 7.4%

1993 7.1% 6.8%

1994 5.9% 6.1%

1995 5.3% 5.6%

1996 4.9% 5.4%

1997 4.2% 4.6%

1998 3.9% 4.5%

1999 3.7% 4.2%

There can be no assurance that the same factors that adversely
affect the economy of the State generally will not also affect
adversely the market value or marketability of obligations issued by
local units of government or local authorities in the State or the
ability of the obligors to pay the principal of or interest on
such obligations.

STATE LITIGATION. A significant number of lawsuits, involving
substantial dollars, have been filed against the State and are
pending. These include tax refund claims, including claims for Single
Business Taxes, condemnation actions, claims relating to funding for
county courts, and other types of actions.

In an order dated June 10, 1997 and a decision rendered July 31, 1997,
the Michigan Supreme Court decided in the consolidated cases of DURANT
v STATE OF MICHIGAN and SCHMIDT v STATE OF MICHIGAN that the special
education, special education transportation, bilingual education,
driver training and school lunch programs provided by local school
districts are state mandated programs within the meaning of
Michigan Constitution , Article 9, (sub-section) 29 (part of the
so-called Headlee Amendment) and, therefore, the state is obligated to
fund these programs at levels established by the Headlee Amendment. In
fashioning a remedy in this case of first impression under the Headlee
Amendment, the Court concluded that, in future cases, the correct
remedy will typically be limited to a declaratory judgment. However,
due to the protracted nature of the DURANT and SCHMIDT litigation, the
Court ruled that money damages, without interest, shall be paid to the
84 plaintiff school districts for the full amount of the underfunding
for the state mandated programs during the 1991-92, 1992-93, and
1993-94 school years.

On November 19, 1997, the Governor signed legislation providing
approximately $212 million to the 84 plaintiff school districts to
cover the underfunding for those three years. This payment was made to
the plaintiff school districts on April 15, 1998 with funds from the
State's Budget Stabilization Fund. The board of education of each
plaintiff school district is to determine the appropriate distribution
of the award between taxpayer relief and/or use by the district for
other public purposes.

The Court has affirmed the award to plaintiffs of their costs
including attorney fees. Approximately 400 other school districts have
asserted similar claims. In companion legislation signed by the
Governor on November 19, 1997, the State will pay each "non-DURANT"
school district for its underfunded state mandated program costs for
those same three years, if the district agreed, by March 2, 1998, to
waive any claim against the State of the same nature as the claims
made by the 84 DURANT plaintiffs through September 30, 1997. All
"non-DURANT" school districts submitted the statutory waiver by March
2, 1998. It is estimated that the aggregate payments to the
"non-DURANT" school districts will, over time, total $632 million.
Those payments, commencing in fiscal year 1998-1999, will be paid out
of the Budget Stabilization Fund and the General Fund, half in annual
payments over 10 years and half in annual payments over 15 years.

On May 14, 1998, more than 100 Michigan school districts and
individuals filed suit in the Michigan Court of Appeals, asserting
that the current version of the State School Aid Act violates the
Headlee Amendment, Michigan Constitution, Article 9, (sub-section)
(sub-section) 25-34, in much the same manner as prior versions of
the Act were ruled unconstitutional by the Michigan Supreme Court in
DURANT V STATE BOARD OF EDUCATION, 456 Mich 175 ( 1997). DURANT,
ET AL. V STATE, ET AL. ("DURANT II"). The DURANT II plaintiffs are
seeking a monetary remedy of approximately $347 million for each of
the 1997-1998, 1998-1999 and 1999-2000 school years for the
State's alleged underfunding of special education services, special
education transportation, and school lunch programs. The DURANT II
plaintiffs are also requesting a declaratory judgement that the
current version of the State School Aid Act will not provide proper
funding levels for future school years. They also seek attorney fees
and costs of the litigation. On June 11, 1998, the Michigan Court of
Appeals dismissed this suit on technical grounds, without
prejudic e, however, to the timely filing of a new complaint. On
September 29, 1998, the Michigan Supreme Court reversed the June 11,
1998 Order of the Michigan Court of Appeals and remanded DURANT II.
The Michigan Supreme Court directed the Michigan Court of Appeals to
resolve expeditiously certain issues raised by the DURANT II
plaintiffs.

On October 30, 1998, the school districts moved to amend their
complaint to challenge the newly-enacted amendments to the State
School Aid Act, 1998 PA 339, to add claims for the 1999-2000 fiscal
year and to add a new count for mandamus against the state treasurer.
On December 2, 1998, the Court of Appeals granted the DURANT II
plaintiffs' motion to amend the complaint and established a briefing
schedule. On September 17, 1999, the Court of Appeals granted the
DURANT II plaintiffs' motion to file a second amended complaint which,
among other provisions, added 125 additional school districts and at
least 125 individuals as plaintiffs, bringing the entire class to
approximately 500 plaintiffs.

In a decision rendered October 19, 1999, the Court of Appeals held
that the State School Aid Act complied with the State's obligations
under Article 9, (sub-section) 29 of the Michigan Constitution to fund
the state-mandated portions of the special education, special
education transportation, and school lunch programs at the levels
required by the Headlee Amendment.

The Court of Appeals further held that certain sections of the
State School Aid Act violated Article 9, (sub-section)11 of the
Michigan Constitution. Article 9, (sub-section) 11 of the Michigan
Constitution provides, in part, that beginning in the 1995-96 state
fiscal year, and each fiscal year thereafter, the State shall
guarantee that the total state and local per pupil revenue for school
operating purposes for each local school district shall not be less
than the 1994-95 total state and local per pupil revenues for school
operating purposes. The Court held that under Article 9, (sub-section)
11, the Legislature must appropriate the state portion of the per
pupil revenue for school operating purposes to local school districts
as unrestricted school aid. Thus, the Court held that to the extent
the Legislature appropriated restricted funds to pay for special
education and special education transportation from funds that were
guaranteed to local school districts as unrestricted aid, the
amendments to the State School Aid Act violated Article 9,
(sub-section) 11.

The Court of Appeals denied plaintiffs' request for mandamus,
injunctive relief, and monetary damages and, as described above,
granted declaratory relief only. The Court also held that plaintiffs
may petition for costs and reasonable attorney fees as allowed by
Article 9, (sub-section) 32 of the Michigan Constitution. No appeal
was filed by any of the parties prior to the November 9, 1999 deadline
for appeal.

SPECIAL CONSIDERATIONS REGARDING PUERTO RICO

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

PORTFOLIO TRANSACTIONS

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

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

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

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

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

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

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

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

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

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

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

For the fiscal periods ended December 31, 1999 and 1998, the
portfolio turnover rates were 19% and 24%, respectively, for Spartan
Michigan Municipal Income.

For the fiscal years ended December 31, 1999, 1998, and 1997, the
funds paid no brokerage commissions.

For t he fiscal year ended Dece mber 31, 1999 the funds paid no
brokerage commissions to firms that provided research services.

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

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

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

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

VALUATION

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

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

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

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

MONEY MARKET FUND. 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 the fund would receive if it sold the instrument.

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

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

PERFORMANCE

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

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

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

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

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

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

The tax-equivalent yield of a fund reflects a comparison of the
fund's yield to the yield of a fully taxable investment.
Tax-equivalent yields are calculated by dividing that portion of a
fund's yield that is tax-exempt by the result of one minus the
applicable specified combined federal and/or state income tax rate and
adding the quotient to that portion, if any, of the fund's yield that
is not tax-exempt.

The following tables show the effect of a shareholder's tax status
on tax-equivalent yield under federal and state income tax laws for
2000. The second table shows the tax-equivalent yields at various
income brackets 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 each fund invests
principally in obligations whose interest is exempt from federal and
applicable state income tax, some portion of the income received by
the fund may be taxable.

Use the first table to find your approximate effective tax bracket
taking into account federal and state taxes for 2 00 0.

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

Taxable Income*

Single Return Joint Return Federal Marginal Rate Michigan State Marginal Rate

$ $ 26,250 $ $ 43,850 15.00% 4.40%

26,251 63,550 43,851 105,950 28.00% 4.40%

63,551 132,600 105,951 161,450 31.00% 4.40%

132,601 288,350 161,451 288,350 36.00% 4.40%

288,351 and up 288,351 and up 39.60% 4.40%

</TABLE>

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

Taxable Income*

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

$ $ 26,250 $ $ 43,850 15.00% 18.7400%

26,251 63,550 43,851 105,950 28.00% 31.1680%

63,551 132,600 105,951 161,450 31.00% 34.0360%

132,601 288,350 161,451 288,350 36.00% 38.8160%

288,351 and up 288,351 and up 39.60% 42.2576%

</TABLE>

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

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

***Does not take into account local taxes, if any, payable on
fund distributions.

Having determined your effective tax bracket, use the following table
to determine the tax-equivalent yield for a giv en tax-exempt
obligation's yield.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
If your combined federal and
state effective tax rate in
2000 is:

31.17% 34.04% 38.82% 42.26%

If a tax-exempt obligation's Tax-equivalent yield would be:
yield is:

2% 2.91% 3.03% 3.27% 3.46%

3% 4.36% 4.55% 4.90% 5.20%

4% 5.81% 6.06% 6.54% 6.93%

5% 7.26% 7.58% 8.17% 8.66%

6% 8.72% 9.10% 9.81% 10.39%

7% 10.17% 10.61% 11.44% 12.12%

</TABLE>

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

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

In addition to average annual returns, a fund may quote unaveraged or
cumulative returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative returns
may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a
series of redemptions, over any time period. Returns may be broken
down into their components of income and capital (including capital
gains and changes in share price) to illustrate the relationship of
these factors and their contributions to return. Returns may be quoted
on a before-tax or after-tax basis. After-tax returns reflect the
return of a hypothetical account after payment of federal and/or state
taxes using assumed tax rates. After-tax returns may assume that taxes
are paid at the time of distribution or once a year or are paid in
cash or by selling shares, that shares are held through the entire
period, sold on the last day of the period, or sold at a future date,
and distributions are reinvested or paid in cash. Returns may or may
not include the eff ect of a fund's small account fee. Excluding a
fund's small account fee from a return calculation produces a higher
return figure. Returns, yiel ds a nd other performance
information may be quoted numerically or in a table, graph, or similar
illustration.

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

HISTORICAL BOND FUND RESULTS. The following table shows the fund's
yield, tax-equivalent yield, and returns for the fiscal period ended
December 31, 1999.

HISTORICAL MONEY MARKET FUND RESULTS. The following table shows the
fund's 7-day yield, tax-equivalent yield, and returns for the fiscal
period ended December 31, 1999.

The tax-equivalent yields for Michigan Municipal Money Market
and Spartan Michigan Municipal Income are based on a combined
effective federal and state income tax rate of 38.82%.

As of December 31, 1999, an estimated 2.28% of Michigan Municipal
Money Market's income was subject to state taxes. Note that Michigan
Municipal Money Market may invest in securities whose income is
subject to the federal alternative minimum tax.

As of December 31, 1999, none of Spartan Michigan Municipal
Income's income was subject to state taxes. Note that Spartan Michigan
Municipal Income may invest in securities whose income is subject to
the federal alternative minimum tax.

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

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

MI Municipal Money Market 4.05% 6.63% 2.82% 3.07% 3.26%

</TABLE>

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

One Year Five Years Life of Fund*

MI Municipal Money Market 2.82% 16.35% 37.74%

</TABLE>

* From January 12, 1990 (commencement of operations).

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

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

Spartan MI Municipal Income 5.08% 8.30% -2.63% 6.01% 6.17%

</TABLE>

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

One Year Five Years Ten Years

Spartan MI Municipal Income -2.63% 33.89% 81.91%

</TABLE>

Note: If FMR had not reimbursed certain fund expenses during these
periods, each fund's returns wo uld have been lower.

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

The following tables show the growth in value of a hypothetical
$10,000 investment in each fund during the 10-year period ended
Decem ber 31, 1999 or life of f und, as applicable, assuming all
distributions were reinvested. Returns are based on past results and
are not an indication of future performance. Tax consequences of
different investments have not been factored into the figures below.

During the period fro m January 12, 1990 (commencement of
operations) to December 31, 1999, a hypothetical $10,000 investment in
Michigan Municipal M oney Market would have grown to
$ 13,774 .

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FIDELITY MICHIGAN MUNICIPAL
MONEY MARKET FUND

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

1999 $ 10,000 $ 3,774 $ 0 $ 13,774

1998 $ 10,000 $ 3,396 $ 0 $ 13,396

1997 $ 10,000 $ 3,005 $ 0 $ 13,005

1996 $ 10,000 $ 2,605 $ 0 $ 12,605

1995 $ 10,000 $ 2,238 $ 0 $ 12,238

1994 $ 10,000 $ 1,839 $ 0 $ 11,839

1993 $ 10,000 $ 1,557 $ 0 $ 11,557

1992 $ 10,000 $ 1,332 $ 0 $ 11,332

1991 $ 10,000 $ 1,038 $ 0 $ 11,038

1990* $ 10,000 $ 566 $ 0 $ 10,566

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY MICHIGAN MUNICIPAL INDEXES
MONEY MARKET FUND

Fiscal Year Ended S&P 500 DJIA Cost of Living**

1999 $ 53,998 $ 53,539 $ 13,347

1998 $ 44,610 $ 42,113 $ 12,998

1997 $ 34,695 $ 35,667 $ 12,791

1996 $ 26,016 $ 28,566 $ 12,577

1995 $ 21,158 $ 22,195 $ 12,173

1994 $ 15,379 $ 16,234 $ 11,872

1993 $ 15,179 $ 15,465 $ 11,562

1992 $ 13,789 $ 13,219 $ 11,253

1991 $ 12,810 $ 12,320 $ 10,936

1990* $ 9,817 $ 9,908 $ 10,611

</TABLE>

* From January 12, 1990 (commencement of operations).

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

Explanatory Notes: With an initial investment of $10,000 in Michigan
Municipal Money Market on January 12, 1990, the net amount invested in
fund shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 13,774. 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 $3,207 for dividends
and $0 for capital gain distributions.

During the 1 0-year period ended December 31, 1999, a hypothetical
$10,000 investment in Spartan Michigan Municipal Income would have
grow n to $18,191.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SPARTAN MICHIGAN MUNICIPAL
INCOME FUND

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

1999 $ 9,793 $ 7,793 $ 605 $ 18,191

1998 $ 10,559 $ 7,470 $ 653 $ 18,682

1997 $ 10,477 $ 6,552 $ 643 $ 17,672

1996 $ 10,180 $ 5,536 $ 494 $ 16,210

1995 $ 10,414 $ 4,764 $ 502 $ 15,680

1994 $ 9,532 $ 3,594 $ 460 $ 13,586

1993 $ 11,117 $ 3,268 $ 304 $ 14,689

1992 $ 10,550 $ 2,332 $ 22 $ 12,904

1991 $ 10,279 $ 1,502 $ 0 $ 11,781

1990 $ 9,811 $ 704 $ 0 $ 10,515

</TABLE>

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

Fiscal Year Ended S&P 500 DJIA Cost of Living

1999 $ 53,289 $ 53,747 $ 13,347

1998 $ 44,024 $ 42,276 $ 12,998

1997 $ 34,240 $ 35,805 $ 12,791

1996 $ 25,674 $ 28,677 $ 12,577

1995 $ 20,880 $ 22,281 $ 12,173

1994 $ 15,177 $ 16,297 $ 11,872

1993 $ 14,980 $ 15,525 $ 11,562

1992 $ 13,608 $ 13,270 $ 11,253

1991 $ 12,642 $ 12,367 $ 10,936

1990 $ 9,688 $ 9,946 $ 10,611

</TABLE>

Explanatory Notes: With an initial investment of $10,000 in Spartan
Michigan Municipal Income on January 1, 1990 the net amount invested
in fund shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 18,812. 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 amount ed to $5,901 for dividends
and $473 for cap ital gain distributions.

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

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

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

The municipal bond fund may compare its performance to the Lehman
Brothers Municipal Bond Index, a market value-weighted index for
investment-grade municipal bonds with maturities of one year or more.
Issues included in the index have been issued after December 31, 1990
and have been issued as part of an offering of at least $50 million.
After December 31, 1995, zero coupon bonds and issues subject to the
alternative minimum tax are included in the index. Issues included in
the index prior to January 1, 2000 have an outstanding par value of at
least $3 million; while issues included in the index after January 1,
2000 have an outstanding par value of at least $5 million.

Spartan Michigan Municipal Income may also compare its performance
to that of the Lehman Brothers Michigan Municipal Bond Index, a market
value-weighted index of Michigan investment-grade municipal bonds with
maturities of one year or more. Issues included in the index have been
issued after December 31, 1990 and have been issued as part of an
offering of at least $50 million. After December 31, 1995, zero coupon
bonds and issues subject to the alternative minimum tax are included
in the index. Issues included in the index prior to January 1, 2000
have an outstanding par value of at least $3 million; while issues
included in the index after January 1, 2000 have an outstanding par
value of at least $5 million.

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

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

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

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

The 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 460 ta x-free money market funds.

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

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

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

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

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

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

As of Decemb er 31, 1999, FMR advised over $35 billion in municipal
fund assets, $143 billion in taxable fixed-income fund assets, $149
billion in money market fund assets, $630 billion in equ ity fund
assets, $22 billion in international fund assets, and $41 billion in
Spartan fund assets. The funds may reference the growth and variety of
money market mutual funds and the adviser's innovation and
participation in the industry. The equity funds under management
figure represents the largest amount of equity fund assets under
management by a mutual fund investment adviser in the United States,
making FMR America's leading equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.

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

ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION

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

DISTRIBUTIONS AND TAXES

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

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

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

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

MICHIGAN TAXES. Under a ruling of the Michigan Department of Treasury,
shareholders of Michigan Municipal Money Market and Spartan Michigan
Municipal Income who are subject to the Michigan income tax or single
business tax will not be subject to the Michigan income tax or single
business tax on their Michigan fund dividends to the extent that such
distributions are exempt-interest dividends for federal income tax
purposes and are attributable to interest on tax-exempt obligations of
the State of Michigan, its political or governmental subdivisions, or
its governmental agencies or instrumentalities (as well as certain
federally tax-exempt obligations of territories and possessions of the
United States). Such distributions will also not be subject to city
income taxes imposed by certain Michigan cities. Any distributions
with respect to shares of each Michigan fund other than those
described in the preceding sentence, including, but not limited to,
long or short-term capital gains, will be subject to the Michigan
income tax and single business tax and may be subject to the city
income taxes imposed by certain Michigan citie s.

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

As of December 31, 1999, Spartan Michigan Municipal Income had a
capital loss carryforward aggregating approximately $14,483,000. This
loss carryforward, of which $12,527,000 and $1,956,000 will expire on
December 31, 2006 and 2007, respectively, is available to offset
future capital gains.

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

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

TRUSTEES AND OFFICERS

The Trustees, Members of the Advisory Board, and executive officers of
the trusts are listed below. The Board of Trustees governs each fund
and is responsible for protecting the interests of shareholders. The
Trustees are experienced executives who meet periodically throughout
the year to oversee each fund's activities, review contractual
arrangements with companies that provide services to each fund, and
review each fund's performance. Except as indicated, each individual
has held the office shown or other offices in the same company for the
last five years. All persons named as Trustees and Members of the
Advisory Board also serve in similar capacities for other funds
advised by FMR or its affiliates. The business address of each
Trustee, Member of the Advisory Board, and officer who is an
"interested person" (as defined in the 1940 Act) is 82 Devonshire
Street, Boston, Massachusetts 02109, which is also the address of FMR.
The business address of all the other Trustees is Fidelity
Investments(registered trademark), 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 ( 69) , Trustee and President, is Chairman,
Chief Executive Officer and a Director of FMR Corp.; a Director and
Chairman of the Board and of the Executive Committee of FMR; Chairman
and a Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.; and a Director of FDC. Abig ail Johnson,
Member of the Advisory Board of Fidelity Municipal Trust and Fidelity
Municipal Trust II, is Mr. Johnson's daughter.

ABIGAIL P. JOHNSON (38), Member of the Advisory Board of Fidelity
Municipal Trust and Fidelity Municipal Trust II (1999), is Vice
President of certain Equity Funds (1997), and is a Director of FMR
Corp. (1994). Before assuming her current responsibilities, Ms.
Johnson managed a number of Fidelity funds. Edward C. Johnson 3d,
Trustee and President of the Funds, is Ms. Johnson's father.

RALPH F. COX ( 67 ), Trustee, is President of RABAR Enterprises
(management consulting-engineering industry, 1994). Prior to February
1994, he was President of Greenhill Petroleum Corporation (petroleum
exploration and production). Until March 1990, Mr. Cox was President
and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Waste Management
Inc. (non-hazardous waste, 1993), CH2M Hill Companies (engineering),
and Bonneville Pacific (independent power and petr oleum
production). In addition, he is a member of advisory boards of Texas
A&M University and the University of Texas at Austin.

PHYLLIS BURKE DAVIS ( 68 ), Trustee. Mrs. Davis is retired from
Avon Products, Inc. where she held various positions including
Senior Vice President of Corporate Affairs and Group Vice President
of U.S. sales, distribution, and manufacturing. She is currently a
Director of BellSouth Corporation (telecommunications), Eaton
Corporation (manufacturing), and the TJX Companies, Inc. (retail
stores), and previously served as a Director of Hallmark Cards, Inc.,
Nabisco Brands, Inc., and Standard Brands, Inc. In addition, she is a
member of the B oard of Directors of the Southampton Hospital in
Southampton, N.Y. (1998).

ROBERT M. GATES ( 56 ), Trustee (1997), is a consultant, author,
and lecturer (1993). Mr. Gates was Director of the Central
Intelli gence Agency (CIA) from 1991-1993. From 1989 to 1991, Mr.
Gates served as Assistant to the President of the United States and
Deputy National Security Advisor. Mr. Gates is a Director of Charles
Stark Draper Laboratory (non-profit), NACCO Industries, Inc. (mining
and manufacturing), and TRW Inc. (automotive, space, defense, and
information technology). Mr. Gates previously served as a Director of
Lucas Varity PLC (automotive components and diesel engines). He is
currently serving as Dean of the George Bush School of Government and
Public Service at Texas A & M University (1999-2000). Mr. Gates also
is a Trustee of the Forum for International Polic y and of the
Endowment Association of the College of William and Mary. In addition,
he is a member of the National Executive Board of the Boy Scouts of
America.

DONALD J. KIRK (6 7), Trustee, is Executive-in-Residence (1995)
at Columbia University Graduate School of Business. From 1987 to
January 1995, Mr. Kirk was a Professor at Columbia University Graduate
School of Business. Prior to 1987, he was Chairman of the Financial
Accounting Standards Board. Mr. Kirk previously served as a Director
of General Re Corporation (reinsuranc e, 1987-199 8) and as a
Director of Valuation Research Corp. (appraisals and valuations,
1993-1995). He serves as Chairman of the Board of Directors of
National Arts Stabilization Inc., Chairman of the Board of Trustees of
the Greenwich Hospital Association, Director of the Yale-New Haven
Health Services Corp. (1998), Vice Chairman of the Public
Oversight Board of the American Institute of Certified Public
Accountants' SEC Practice Section (1995), and as a Public Governor of
the National Association of Securities Dealers, Inc. (1996).

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

*PETER S. LYNCH (56 ), Trustee, is Vice Chairman and Director of
FMR. Prior to May 31, 1990, he was a Director of FMR and Executive
Vice President of FMR (a position he held until March 31, 1991); Vice
President of Fidelity Magellan(registered trademark) 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 (6 6 ), Trustee (1997), is the Interim
Chancellor for the University of North Carolina at Chapel Hill.
Pre viously he had served from 1995 through 1998 as Vice President
of Finance for the University of North Carolina (16-school system).
Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman
of the Board of BellSouth Corporation (telecommunications, 1984) and
President of BellSouth Enterprises (1986). He is currently a Director
of Liberty Corporation (holding company, 1984), Duke-Weeks Realty
Corporation (real estate, 1994), Carolina Power and Light Company
(electric utility, 1996), the Kenan Transport Company (trucking,
1996), and Dynatech Corporation (electronics, 1999). Previously, he
was a Director of First American Corporation (bank holding company,
1979-1996). In addition, Mr. McCoy served as a member of the Board of
Visitors for the University of North Carolina at Chapel Hill
(1994-1998) and currently serves on the Board of Visitors of the
Kenan-Flager Business School (University of North Carolina at Chapel
Hill, 1988).

GERALD C. McDONOUGH ( 71) , Trustee and Chair man of the
non-interested Trustees, is Chairman of G.M. Management Group
(strategic advisory services). Mr. McDonough is a Director and
Chairman of the Boar d 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 ( 66 ), Trustee (1993), is Chairman Emeritus, of
Lexmark International, Inc. (office machines, 1991) where he still
remains a member of the Board. Prior to 1991, he held the positions of
Vice President of International Business Machines Corporation ("IBM")
and President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993), Imation Corp. (imaging and information storage, 1997). He is a
Board member of Dynatech Corporation (electronics, 199 9).

*ROBERT C. POZEN ( 53 ), 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 ( 71) , Trustee, is President of The Wales
Group, Inc. (management and financial advisory services). Prior to
re tiring in 1987, Mr. Williams served as Chairman of the Board of
First Wachovia Corporation (bank holding company), and Chairman and
Chief Executive Officer of The First National Bank of Atlanta and
First Atlanta Corporation (bank holding company). He is currently a
Director of National Life Insurance Company of Vermont and American
Software, Inc. Mr. Williams was previously a Director of ConAgra, Inc.
(agric ultural products), Georgia Power Company (electric utility),
and Avado, Inc. (restaurants).

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

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

FRED L. HENNING, JR. (60 ), is President of Fidelity
Investments Fixed-Income Division (1998), and Senior Vice President of
FMR and of Fidelity Investments Money Management, Inc. Mr. Henning
joined Fidelity in 1977 as portfolio manager for Fidelity Daily Income
Trust Fund. Since then, he has held a number of positions with FMR and
its affiliates and serves as an officer of other investment companies
managed or advised by FMR.

NORMAN U. LIND (43 ), is Vice President of Spartan Michigan
Municipal Income Fund (1998), and other funds advised by FMR. Prior to
his current responsibilities, Mr. Lind managed a variety of Fidelity
funds.

DIANE M. MCLAUGHLIN ( 36 ), is Vice President of Fidelity
Michigan Municipal Money Market Fund (1997), and other funds advised
by FMR. Prior to her current responsibilities, Ms. McLaughlin served
as a senior trader and has managed a variety of funds.

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

Robert A. Dwight (41), Treasurer (2000), is Treasurer of the
Fidelity funds and is an employee of FMR. Prior to becoming Treasurer
of the Fidelity funds, he served as President of Fidelity Accounting
and Custody Services (FACS). Before joining Fidelity, Mr. Dwight was
Senior Vice President of fund accounting operations for The Boston
Company.

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

MATTHEW N. KARSTETTER ( 3 8), Deputy Treasurer (1998), is Deputy
Treasurer of the Fidelity funds and is an employee of FMR (1998).
Before joining FMR, Mr. Karstetter served as Vice President of
Investment Accounting and Treasurer of IDS Mutual Funds at American
Express Financial Advisors (1996-1998). Prior to 1996, Mr. Karstetter
was Vice President, Mutual Fund Services at State Street Bank & Trust
(1991-1996).

STANLEY N. GRIFFITH ( 53) , Assistant Vice President (1998), is
Assistant Vice President of Fidelity's Fixed-Income Funds (1998) and
an employee of FMR Corp.

JOHN H. COSTELLO ( 53 ), Assistant Treasurer, is an employee of
FMR.

THOMAS J. SIMPSON ( 41 ), Assistant Treasurer (1996), is
Assistant Treasurer of Fidelity's Fixed-Income Funds (1998) and an
employee of FMR (1996). Prior to joining FMR, Mr. Simpson was Vice
President and Fund Controller of Liberty Investment Services
(1987-1995).

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

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

Trustees and Members of the Aggregate Compensation from Aggregate Compensation from Total Compensation from the
Advisory Board Michigan Municipal Money Spartan Michigan Municipal Fund Complex*,A
MarketB IncomeB

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

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

Ralph F. Cox $ 110 $ 133 $ 217,500

Phyllis Burke Davis $ 107 $ 129 $ 211,500

Robert M. Gates $ 110 $ 133 $ 217,500

E. Bradley Jones**** $ 110 $ 133 $ 217,500

Donald J. Kirk $ 110 $ 133 $ 226,500

Ned C. Lautenbach*** $ 27 $ 30 $ 54,000

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

William O. McCoy $ 108 $ 132 $ 214,500

Gerald C. McDonough $ 136 $ 165 $ 269,000

Marvin L. Mann $ 110 $ 133 $ 217,500

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

Thomas R. Williams $ 107 $ 131 $ 213,000

</TABLE>

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

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

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

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

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

B Compensation figures include cash.

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

As of December 31, 1999, the Trustees, Members of the Advisory
Board, and o fficers of each fund owned, in the aggregate, less
than 1% of each fund's total outstanding shar es.

CONTROL OF INVESTMENT ADVISERS

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

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

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

MANAGEMENT CONTRACTS

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

MANAGEMENT SERVICES. Under the terms of its management contract with
each fund, FMR acts as investment adviser and, subject to the
supervision of the Board of Trustees, directs the investments of the
fund in accordance with its investment objective, policies and
limitations. FMR also provides each fund with all necessary office
facilities and personnel for servicing the fund's investments,
compensates all officers of each fund and all Trustees who are
"interested persons" of the 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. In addition to the management fee payable
to FMR and the fees payable to the transfer, dividend disbursing, and
shareholder servicing agent and pricing and bookkeeping agent, each
fund pays all of its expenses that are not assumed by those parties.
Each fund pays for the typesetting, printing, and mailing of its proxy
materials to shareholders, legal expenses, and the fees of the
custodian, au ditor, and non-interested Trustees. Each fund's
management contract further provides that the fund will pay for
typesetting, printing, and mailing prospectuses, statements of
additional information, notices, and reports to shareholders; however,
under the terms of each fund's transfer agent agreement, the transfer
agent bears the costs of providing these services to existing
shareholders. Other expenses paid by each fund include interest,
taxes, brokerage commissions, the fund's proportionate share of
insurance premiums and Investment Company Institute dues, and the
costs of registering shares under federal securities laws and making
necessary filings under state securities laws. Each fund is also
liable for such non-recurring expenses as may arise, including costs
of any litigation to which the fund may be a party, and any obligation
it may have to indemnify its officers and Trustees with respect to
litigation.

MANAGEMENT FEES. For the services of FMR under the management
contract, each fund pays FMR a monthly management fee which has two
components: a group fee rate and an individual fund fee rate.

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

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

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

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

3 - 6 .3400 50 .2188

6 - 9 .3100 100 .1869

9 - 12 .2800 150 .1736

12 - 15 .2500 200 .1652

15 - 18 .2200 250 .1587

18 - 21 .2000 300 .1536

21 - 24 .1900 350 .1494

24 - 30 .1800 400 .1459

30 - 36 .1750 450 .1427

36 - 42 .1700 500 .1399

42 - 48 .1650 550 .1372

48 - 66 .1600 600 .1349

66 - 84 .1550 650 .1328

84 - 120 .1500 700 .1309

120 - 156 .1450 750 .1291

156 - 192 .1400 800 .1275

192 - 228 .1350 850 .1260

228 - 264 .1300 900 .1246

264 - 300 .1275 950 .1233

300 - 336 .1250 1,000 .1220

336 - 372 .1225 1,050 .1209

372 - 408 .1200 1,100 .1197

408 - 444 .1175 1,150 .1187

444 - 480 .1150 1,200 .1177

480 - 516 .1125 1,250 .1167

516 - 587 .1100 1,300 .1158

587 - 646 .1080 1,350 .1149

646 - 711 .1060 1,400 .1141

711 - 782 .1040

782 - 860 .1020

860 - 946 .1000

946 - 1,041 .0980

1,041 - 1,145 .0960

1,145 - 1,260 .0940

Over 1,260 .0920

</TABLE>

The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
r ate at $826 billion of group net assets - the approximate level
for December 1999 - was 0.1267%, which is the weighted average of the
respec tive fee rates for each level of group net assets up to $826
billion.

Each fund's individual fund fee rate is 0.25% . Based on the
average group net assets of the funds advised by FMR for December
19 9 9, each fund's annual management fee rate would be
calculated as follows:

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

Michigan Municipal Money Market 0.1267% + 0.25% = 0.3767%

Spartan Michigan Municipal 0.1267% + 0.25% = 0.3767%
Income

</TABLE>

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

The following table shows the amount of management fees paid by each
fund to FMR for the past three fiscal years.

<TABLE>
<CAPTION>
<S> <C> <C>
Fund Fiscal Years Ended December 31 Management Fees Paid to FMR

Michigan Municipal Money Market 1999 $ 1,492,726

1998 $ 1,211,365

1997 $ 1,041,389

Spartan Michigan Municipal 1999 $ 1,766,626
Income

1998 $ 1,788,097

1997 $ 1,745,102

</TABLE>

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

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

FMR volunt arily agreed to reimburse Spartan Michigan Municipal
Income if and to the extent that the fund's aggregate operating
expen ses, including management fees, were in excess of an annual
rate of its average net assets. The table below shows the periods of
reimbursement and level of expense limitations for the applicable
fund; the dollar amount of management fees incurred under the fund's
contract before reimbursement; and t he dollar amount of management
fees reimbursed by FMR under the expense reimbursement for each
period.

Periods of Expense Limitation Aggregate Operating Expense
From To Limitation

Spartan Michigan Municipal January 1, 1999 December 31, 1999 0.55%
Income

January 1, 1998 December 31, 1998 0.55%

April 1, 1997 December 31, 1997 0.55%

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Years Ended December 31 Management Fee Before Amount of Management Fee
Reimbursement Reimbursement

Spartan Michigan Municipal 1999 $ 1,766,626 $ 0
Income

1998 $ 1,788,097 $ 25,744

1997 $ 1,745,102 $ 95,333

</TABLE>

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

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

On behalf of the money market fund, for the fiscal year ended December
31, 1998 and 1997, FMR paid FMR Texas fees of $ 36,507 and
$520,694, respectively. On behalf of the money market fund, for the
fiscal year ended December 31, 1999 and 1998, FMR paid FIMM fees of
$ 746,363 and $569,175, respectively.

On b ehalf of Spartan Michigan Municipal Income, for the fiscal year
ended December 31, 1999, FMR paid FIMM fees of $883,313 .

DISTRIBUTION SERVICES

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

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

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

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

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

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

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

TRANSFER AND SERVICE AGENT AGREEMENTS

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

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

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

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

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

Each fund has also entered into a service agent agreement with
C itibank. Under the terms of the agreements, Citibank provides
pricing and bookkeeping services for each fund. Citibank in turn has
en tered 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 C itibank .

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

The annual rates f or pricing and bookkeeping services for the
domestic fixed-income fund are 0.0275% of the first $500 million of
average net assets, 0.0175% of average net assets between $500 million
and $3 billion, 0.0021% of average net assets between $3 billion and
$25 billion, and 0.00075% of average net assets in excess of $25
billion. The fee, not including reim bursement for out-of-pocket
expenses, is limited to a minimum of $60,000 per year.

The annua l rates for pricing and bookkeeping services for
the money market fund are 0.0150% of the first $500 million of
average net assets, 0.0075% of average net assets between $500 million
and $10 billion, 0.0021% of average net assets between $10 billion and
$25 billion, and 0.00075% of average net assets in excess of $25
billion. The fee, not includin g reimbursement for out-of-pocket
expenses, is limited to a minimum of $40,000 per year.

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

Fund 1999 1998 1997

Michigan Municipal Money Market $ 72,509 $ 64,380 $ 57,582

Spartan Michigan Municipal $ 138,711 $ 195,895 $ 190,407
Income

DESCRIPTION OF THE TRUSTS

TRUST ORGANIZATION. Fidelity Michigan Municipal Money Mark et Fund
is a fund o f Fidelity Municipal Trust II, an open-end management
in vestment company orga nized as a Delaware business trust on
June 20, 1991. On February 20, 1996, Fidelity Michigan Muni cipal
Money Market Fund changed its name from Fidelity Michigan Money
Market Portfolio to Fidelity Michigan Municipal Money Market Fund.
Currently, there are three funds in Fidelity Michigan Municipal
Trust II: Fidelity Michigan Municipal Money Market Fund, Fidelity Ohio
Municipal Money Market Fund and Spartan Pennsylvania Municipal Money
Market Fund. Spartan Michigan Municipal Income Fund is a fund of
Fidelity Municipal Trust, a n open-end management in vestment
company orga nized as a Massachusetts business trust on June 22,
1984 . On February 20, 1996, Spartan Michigan Municipal Income Fund
changed its name from Fidelity Michigan Tax-Free High Yield Portfolio
to Fidelity Michigan Municipal Income Fund. On April 1, 1997,
Spar tan Michiga n Municipal Income Fund changed its name from
Fidelity Michigan Municipal Income Fund to Spartan Michigan Municipal
Income Fund. Currently, there are five funds in Fidelity
Municipal Trust: Spartan Michigan Municipal Income Fund, Spartan
Minnesota Municipal Income Fund , Spartan Ohio M unicipal Income
Fund, Spartan Pennsylvania Municipal Income Fund, and Spartan
Municipal In come Fund. The Trustees are permitted to create
additional funds in the trusts.

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 to the rights of creditors, are allocated to such
fund, and constitute the underlying assets of such fund. The
underlying assets of each fund in a trust shall be charged with the
liabilities and expenses attributable to such fund. Any general
expenses of the respective trusts shall be all ocated between or
among any one or more of its funds.

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

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

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

The Declaration of Trust contains an express disclaimer of shareholder
liability for the debts, liabilities, obligations, and expenses of the
trust or fund. The Declaration of Trust provides that the
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 relating to the
trust or to a fund shall include a provision limiting the obligations
created thereby to the Massachusetts trust or to one or more funds and
its or their assets. The Declaration of Trust further provides that
shareholders of a fund shall not have a claim on or right to any
assets belonging to any other fund.

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

SHAREHOLDER 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. The Trust Instrument
provides that the trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires
that each agreement, obligation, or instrument entered into or
executed by the trust or the Trustees relating to the trust or to a
fund shall include a provision limiting the obligations created
thereby to the trust or to one or more funds and its or their assets.
The Trust Instrument further provides that shareholders of a fund
shall not have a claim on or right to any assets belonging to any
other fund.

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 solely by reason of his or her
being or having been a shareholder and not because of his or her acts
or omissions or for some other reason. The 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 a 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.

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

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

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

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

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

The trust or any of its funds may be terminated upon the sale of its
assets to another open-end management investment company or series
thereof, or upon liquidation and distribution of its assets. Generally
such terminations must be approved by a vote of shareholders. In the
event of the dissolution or liquidation of the trust, shareholders of
each of its funds are entitled to receive the underlying assets of
such fund available for distribution. In the event of the dissolution
or liquidation of a fund, shareholders of that fund are entitled to
receive the underlying assets of the fund available for distribution.

Under the Trust Instrument, the Trustees may, without shareholder
vote, in order to change the form of organization of the trust cause
the trust to merge or consolidate with one or more trusts,
partnerships, associations, limited liability companies or
corporations, as long as the surviving entity is an open-end
management investment company, or is a fund thereof, that will succeed
to or assume the trust's registration statement, or cause the trust to
incorporate under Delaware law.

CUSTODIAN. Citiba nk, N.A., 11 1 Wall Street, New York, New York,
is custodian of the assets of the funds. The custodian is responsible
for the safekeeping of a fund's assets and the appointment of any
subcustodian banks and clearing agencies.

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

AUDITOR. PricewaterhouseCoopers LLP, 160 Federal Street, Boston,
Massachusetts , serves as independent accountant for each fund.
The auditor examines financial statements for the funds and provides
other audit, tax, and related services.

FINANCIAL STATEMENTS

Each fund's financial stat ements and financial highl ights for
the fiscal year ended December 31, 1999 , and report of the auditor,
are included in the fun d's annual repo rt and are incorporated
herein by reference.

APPENDIX

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

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

FIDELITY'S
OHIO MUNICIPAL
FUNDS

FIDELITY
OHIO MUNICIPAL
MONEY MARKET FUND
(fund number 419, trading symbol FOMXX)

SPARTAN (REGISTERED TRADEMARK)
OHIO MUNICIPAL
INCOME FUND
(fund number 088, trading symbol FOHFX)

PROSPECTUS
FEBRUARY 28, 2000

(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109

CONTENTS

FUND SUMMARY 2 INVESTMENT SUMMARY

3 PERFORMANCE

4 FEE TABLE

FUND BASICS 6 INVESTMENT DETAILS

7 VALUING SHARES

SHAREHOLDER INFORMATION 8 BUYING AND SELLING SHARES

15 EXCHANGING SHARES

15 ACCOUNT FEATURES AND POLICIES

18 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS

18 TAX CONSEQUENCES

FUND SERVICES 19 FUND MANAGEMENT

19 FUND DISTRIBUTION

APPENDIX 19 FINANCIAL HIGHLIGHTS

FUND SUMMARY

INVESTMENT SUMMARY

INVESTMENT OBJECTIVE

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

PRINCIPAL INVESTMENT STRATEGIES

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

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

(small solid bullet) Normally investing so that at least 80% of the
fund's income distributions is exempt from federal and Ohio income
taxes.

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

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

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

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

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

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

INVESTMENT OBJECTIVE

SPARTAN OHIO MUNICIPAL INCOME FUND seeks a high level of current
income exempt from federal income tax and Ohio personal income tax.
The fund also seeks income exempt from certain business or corporate
taxes.

PRINCIPAL INVESTMENT STRATEGIES

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

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

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

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

(small solid bullet) Managing the fund to have similar overall
interest rate risk to the Lehman Brothers Ohio 4 Plus Year Enhanced
Municipal Bond Index.

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

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

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

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

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

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

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

PERFORMANCE

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

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEAR-BY-YEAR RETURNS

OH MUNICIPAL MONEY MARKET

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

5.90% 4.50% 2.81% 2.09% 2.50% 3.48% 3.08% 3.29% 3.09% 2.86%

</TABLE>

Percentage (%)
Row: 1, Col: 1, Value: 5.9
Row: 2, Col: 1, Value: 4.5
Row: 3, Col: 1, Value: 2.81
Row: 4, Col: 1, Value: 2.09
Row: 5, Col: 1, Value: 2.5
Row: 6, Col: 1, Value: 3.48
Row: 7, Col: 1, Value: 3.08
Row: 8, Col: 1, Value: 3.29
Row: 9, Col: 1, Value: 3.09
Row: 10, Col: 1, Value: 2.86

DURING THE PERIODS SHOWN IN THE CHART FOR OHIO MUNICIPAL MONEY MARKET,
THE HIGHEST RETURN FOR A QUARTER WAS 1.46 % (QUARTER ENDED
DECEMBER 31 , 19 90 ) AND THE LOWEST RETURN FOR A QUARTER
WAS 0.49 % (QUARTER ENDED MARCH 31 , 19 94 ).

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

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

7.50% 11.45% 8.66% 12.56% -5.55% 16.39% 4.23% 8.74% 5.79% -2.83%

</TABLE>

Percentage (%)
Row: 1, Col: 1, Value: 7.5
Row: 2, Col: 1, Value: 11.45
Row: 3, Col: 1, Value: 8.66
Row: 4, Col: 1, Value: 12.56
Row: 5, Col: 1, Value: -5.55
Row: 6, Col: 1, Value: 16.39
Row: 7, Col: 1, Value: 4.23
Row: 8, Col: 1, Value: 8.739999999999998
Row: 9, Col: 1, Value: 5.79
Row: 10, Col: 1, Value: -2.83

DURING THE PERIODS SHOWN IN THE CHART FOR SPARTAN OHIO MUNICIPAL
INCOME, THE HIGHEST RETURN FOR A QUARTER WAS 6.95 % (QUARTER
ENDED MARCH 31 , 19 95 ) AND THE LOWEST RETURN FOR A
QUARTER WAS -5.64 % (QUARTER ENDED MARCH 31 ,
19 94 ).

AVERAGE ANNUAL RETURNS

For the periods ended Past 1 year Past 5 years Past 10 years
December 31, 1999

Ohio Municipal Money Market 2.86% 3.16% 3.35%

Spartan Ohio Municipal Income -2.83% 6.28% 6.50%

Lehman Bros. Municipal Bond -2.06% 6.91% 6.89%
Index

Lehman Bros. OH 4 Plus Year -2.45% 6.76% n/a
Enhanced Municipal Bond Index

Lipper OH Municipal Debt -4.02% 5.75% 6.18%
Funds Average

If FMR had not reimbursed certain fund expenses during these periods,
each fund's returns would have been lower.

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

The Lehman Brothers Ohio 4 Plus Year Enhanced Municipal Bond Index is
a market value-weighted index of Ohio investment-grade municipal bonds
with maturities of four years or more.

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

FEE TABLE

The following table describes the fees and expenses that are incurred
when you buy, hold, or sell shares of a fund. The annual fund
operating expenses provided below for each fund do not reflect the
effect of any reduction of certain expenses during the period.

SHAREHOLDER FEES (PAID BY THE INVESTOR DIRECTLY)

Sales charge (load) on None
purchases and reinvested
distributions

Deferred sales charge (load) None
on redemptions

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

ANNUAL FUND OPERATING EXPENSES (PAID FROM FUND ASSETS)

OH MUNICIPAL MONEY MARKET Management fee 0.38%

Distribution and Service None
(12b-1) fee

Other expenses 0.19%

Total annual fund operating 0.57%
expenses

SPARTAN OH MUNICIPAL INCOME Management fee 0.38%

Distribution and Service None
(12b-1) fee

Other expenses 0.14%

Total annual fund operating 0.52%
expensesA

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

T hrough arrangements with each fund's custodian and transfer
agent, credits realized as a result of uninvested cash balances are
used to reduce custodian and transfer agent expenses. Including these
reductions, the total fund operating expenses would have been
0.56 % for Ohio Municipal Money Market and 0.51 % for
Spartan Ohio Municipal Income.

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

OH MUNICIPAL MONEY MARKET 1 year $ 58

3 years $ 183

5 years $ 318

10 years $ 714

SPARTAN OH MUNICIPAL INCOME 1 year $ 53

3 years $ 167

5 years $ 291

10 years $ 653

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE

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

PRINCIPAL INVESTMENT STRATEGIES

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

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

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

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

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

INVESTMENT OBJECTIVE

PRINCIPAL INVESTMENT STRATEGIES

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

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

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

FMR uses the Lehman Brothers Ohio 4 Plus Year Enhanced Municipal Bond
Index as a guide in structuring the fund and selecting its
investments. FMR manages the fund to have similar overall interest
rate risk to the index. As of December 31, 1999, the dollar-weighted
average maturity of the fund and the index was approximately
13.3 and 14.6 years, respectively.

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

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

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

DESCRIPTION OF PRINCIPAL SECURITY TYPES

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

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

PRINCIPAL INVESTMENT RISKS

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

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

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

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

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

GEOGRAPHIC CONCENTRATION. Ohio's economy, like that of other
industrially developed states, tends to be more cyclical and
vulnerable to economic downturns than the economies of some other
states and the United States as a whole.

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

FUNDAMENTAL INVESTMENT POLICIES

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

OHIO MUNICIPAL MONEY MARKET FUND seeks as high a level of current
income, exempt from federal income tax and from Ohio personal income
tax, as is consistent with the preservation of capital. The fund will
normally invest so that at least 80% of its income distributions are
exempt from federal and state income tax.

SPARTAN OHIO MUNICIPAL INCOME FUND seeks a high level of current
income exempt from federal income tax and Ohio personal income tax by
investing primarily in investment-grade municipal bonds. The fund also
seeks income exempt from certain business or corporate taxes.

VALUING SHARES

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

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

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

GENERAL INFORMATION

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.

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

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

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

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

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

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

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

Please use the following addresses:

BUYING SHARES

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

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

SELLING SHARES

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

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

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

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

WAYS TO SET UP YOUR ACCOUNT

INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS

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

TRUST
FOR MONEY BEING INVESTED BY A TRUST

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

BUYING SHARES

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

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

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

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

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

(small solid bullet) Fidelity does not accept cash.

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

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

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

MINIMUMS

TO OPEN AN ACCOUNT

For OH Muni Money Market $5,000

For Spartan OH Muni Income $10,000

TO ADD TO AN ACCOUNT

For OH Muni Money Market $500

Through regular investment plans $100

For Spartan OH Muni Income $1,000

Through regular investment plans $500

MINIMUM BALANCE

For OH Muni Money Market $2,000

For Spartan OH Muni Income $5,000

There is no minimum account balance or initial or subsequent purchase
minimum for investments through Fidelity Portfolio Advisory ServicesSM
or a qualified state tuition program.

In addition, each fund may waive or lower purchase minimums in other
circumstances.

KEY INFORMATION

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

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

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

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

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

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

SELLING SHARES

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

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

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

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

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

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

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

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

(small solid bullet) If you are selling some but not all of your Ohio
Municipal Money Market shares, leave at least $2,000 worth of shares
in the account to keep it open, except accounts not subject to account
minimums. If you are selling some but not all of your Spartan Ohio
Municipal Income shares, leave at least $5,000 worth of shares in the
account to keep it open, except accounts not subject to account
minimums.