Parents, grandparents and climate advocates asked the Joint Committee on Revenue to support H.3206, legislation that would make qualified low‑fee fossil‑free 529 plans eligible for the Massachusetts state income‑tax deduction even if the plan is managed outside the state’s MEFA U‑Fund.

Witnesses described a common choice facing savers: accept the state tax deduction by investing in the MEFA U‑Fund options (many of which include fossil‑fuel company holdings), or invest in a fossil‑free option available in other states but forfeit the Massachusetts tax deduction. Testimony described outreach to MEFA and Fidelity; Fidelity recently launched a Massachusetts Climate Action portfolio that excludes fossil fuels, but witnesses said the Fidelity fund carries a high management fee (1.22% annually), is a static fund rather than age‑based, and is not as visible on MEFA’s site as families would expect.

Alan Field, a Winchester resident and member of a climate organizing group, and members of Mothers Out Front, 3/50Mass and Third Act said the bill would remove an avoidable inequity by allowing families to both invest according to climate values and claim the standard $1,000 (individual) or $2,000 (joint) Massachusetts tax deduction for 529 contributions. Supporters cited lower‑cost fossil‑free options available in other states (Vanguard, Parnassus) that deliver competitive returns at materially lower fees.

Fidelity and MEFA representatives were not present; witnesses said MEFA and Fidelity had been engaged in conversations and that the Fidelity portfolio represented progress but did not fully meet demand for low‑fee, age‑based fossil‑free options. The committee did not vote; proponents asked that H.3206 be reported favorably and indicated they would submit written follow‑up materials documenting fee comparisons and fund performance.

No formal committee action was taken at the hearing.