Statement of Additional Information Supplement February 28, 2000*

AXP Bond Fund S-6495-20 P (10/99)
AXP Extra Income Fund S-6370-20 P (7/99)
AXP Federal Income Fund S-6042-20 R (7/99)
AXP Global Bond Fund S-6309-20 R (12/99)
AXP High Yield Tax-Exempt Fund S-6430-20 T (1/00)
AXP Insured Tax-Exempt Fund S-6327-20 T (8/99)
AXP Intermediate Tax-Exempt Fund S-6355-20 E (1/00)
AXP Massachusetts Tax-Exempt Fund S-6328-20 R (8/99)
AXP Michigan Tax-Exempt Fund S-6328-20 R (8/99)
AXP Minnesota Tax-Exempt Fund S-6328-20  R (8/99)
AXP New York Tax-Exempt Fund S-6328-20 R (8/99)
AXP Ohio Tax-Exempt Fund  S-6328-20 R (8/99)
AXP Selective Fund S-6376-20 N (7/99)
AXP Tax-Exempt Bond Fund S-6310-20 T (1/00)

Effective March 20, 2000, the "Sales Charge" information is revised as follows:

Class A - Calculation of the Sales Charge

Sales charges are determined as follows:

- ----------------------------------------- --------------------------------------
                           Sales charge as a percentage of:
- ----------------------- --------------------------------------------------------

- ----------------------- ----------------------------------- --------------------
Amount of Investment                  Public                       Net
                                  Offering Price              Amount Invested
- ----------------------- ----------------------------------- --------------------
- ----------------------- ----------------------------------- --------------------
Up to $50,000                          4.75%
- ----------------------- ----------------------------------- --------------------
- ----------------------- ----------------------------------- --------------------
$50,000-$99,999                        4.50
- ----------------------- ----------------------------------- --------------------
- ----------------------- ----------------------------------- --------------------
$100,000-$249,999                      3.75
- ----------------------- ----------------------------------- --------------------
- ----------------------- ----------------------------------- --------------------
$250,000-$499,999                      2.50
- ----------------------- ----------------------------------- --------------------
- ----------------------- ----------------------------------- --------------------
$500,000-$999,999                      2.00**
- ----------------------- ----------------------------------- --------------------
- ----------------------- ----------------------------------- --------------------
$1,000,000 or more                     0.00
- ----------------------- ----------------------------------- --------------------
**The sales charge will be waived until Dec. 31, 2000.

All other  references  to the sales  charge on Class A shares  are  revised  to
reflect a 4.75% maximum sales charge.

The  section  titled  "Class A - Letter of Intent  (LOI)"  has been  reflect  as
follows:

If you intend to invest a large amount over a period of time, you can reduce the
sales charge in Class A by filing a LOI. The agreement can start at any time and
will remain in effect for 13 months. The LOI start date can be backdated 90 days
but  cannot be  backdated  prior to March 20,  2000.  Your  investments  will be
charged the charges that apply to the amount you have committed to invest.  Five
percent of the commitment  amount will be placed in escrow.  If your  commitment
amount is reached within the 13-month  period,  the shares will be released from
escrow.  If you do not invest the commitment amount by the end of the 13 months,
the remaining  unpaid sales charge will be redeemed from the escrowed shares and
the remaining  balance  released  from escrow.  The  commitment  amount does not
include  purchases in any class of American  Express funds,  other than Class A;
purchases in American Express funds held within a product;  and purchases of AXP
Cash  Management  Fund and AXP Tax-Free Money Fund unless they are  subsequently
exchanged  to Class A of an  American  Express  mutual  fund within the 13 month
period. A LOI is not an option (absolute right) to buy shares.


S-6317 A (2/00)
*Destroy next update