Massachusetts House Bill H3206

Massachusetts 2025-2026 Regular Session

• Introduced: 2/27/25
• Refer: 2/27/25

Caption

Relative to fossil fuel free 529s

Impact

If enacted, this legislation is expected to facilitate the creation of investment portfolios that align with environmentally-conscious values, appealing particularly to families concerned about the climate implications of fossil fuel investments. The new investment criteria would provide Massachusetts residents with sustainable options for saving for education, potentially increasing participation in these programs by environmentally minded families. Overall, this could lead to a gradual reallocation of investment patterns towards greener alternatives in the state's educational savings landscape.

Summary

House Bill H3206, titled 'An Act relative to fossil fuel free 529s', seeks to amend the existing regulations concerning prepaid tuition and college savings programs in Massachusetts. Specifically, the bill proposes the inclusion of 'fossil fuel free portfolios' as investment options within these programs. The definition of a 'fossil fuel free portfolio' includes a restriction that fossil fuel investments cannot exceed 40.25% of the total portfolio, along with a requirement related to expense ratios to ensure cost-effectiveness. Furthermore, it mandates clear exclusion of fossil fuel companies in the fund's prospectus to promote transparency to consumers.

Contention

Notable points of contention surrounding this bill include potential pushback from traditional investment firms that may rely on fossil fuels for their strategies. Critics may argue that limiting investment options could hinder financial returns on college savings programs, thus placing families at a disadvantage. Furthermore, some stakeholders may question the balance between ethical investing and financial performance, raising concerns about how these restrictions might impact the broader investment ecosystem in Massachusetts.