CHILD CARE ASSISTANCE PROGRAM ACT, the official text

SENATE BILL 241

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

George K. Muñoz and Doreen Y. Gallegos and Linda M. Trujillo
and Michael Padilla and Roberto "Bobby" J. Gonzales

AN ACT

RELATING TO CHILDREN; ENACTING THE CHILD CARE ASSISTANCE
PROGRAM ACT; ESTABLISHING THE CHILD CARE ASSISTANCE PROGRAM;
PROVIDING FOR PAYMENTS TO CHILD CARE FACILITIES THAT
PARTICIPATE IN THE CHILD CARE ASSISTANCE PROGRAM; PROVIDING
ELIGIBILITY AND REGULATORY REQUIREMENTS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. A new section of the Children's Code is
enacted to read:

"[NEW MATERIAL] SHORT TITLE.--This act may be cited as the
"Child Care Assistance Program Act"."

SECTION 2. A new section of the Children's Code is
enacted to read:

"[NEW MATERIAL] DEFINITIONS.--As used in the Child Care
Assistance Program Act:

A. "at-risk child" means a child who may be
vulnerable to or experiencing negative outcomes due to factors
such as poverty, domestic violence, substance abuse, mental
health issues, family involvement in the justice system,
housing instability or homelessness; who has or is at risk of
having a developmental delay or a disability; or for whom a
child care facility has made a report to a central intake
system of the children, youth and families department;

B. "child care assistance" means funding
administered by the department to a child care facility to
provide child care for eligible children through the child care
assistance program;

C. "child care facility" means a public or private
entity, facility or premises that is licensed or registered and
regulated by the department at which children receive child
care services, including care, education and supervision, for
less than twenty-four hours per day;

D. "consensus revenue estimating group" means the
professional economists or revenue analysts from the department
of finance and administration, the taxation and revenue
department, the department of transportation and the
legislative finance committee;

E. "department" means the early childhood education
and care department;

F. "developmental delay" means a discrepancy
between chronological age, after correction for prematurity,
and developmental age in one or more of the following areas of
development: cognition; communication; physical and motor
development, including vision and hearing; social and emotional
development; and adaptive development;

G. "disability" means a severe chronic disability
of a person that is attributable to a mental or physical
impairment;

H. "early intervention" means services provided
through the family, infant, toddler program of the department
that are designed to meet the developmental needs of children
from birth to age three who have or who are at risk of having a
developmental delay or disability;

I. "early intervention provider" means a person who
provides early intervention;

J. "early pre-kindergarten program" means an early
pre-kindergarten program as defined in the Pre-Kindergarten
Act;

K. "earned income" means income received as gross
wages from employment or as profit from self-employment;

L. "incapacitation" means a person is unable to
meet an eligibility requirement due to an inability to care for
a child because of a disability, health-related illness,
rehabilitation treatment or other reason as determined by the
department;

M. "legal guardian" includes both a temporary and
permanent legal guardian or custodian;

N. "pre-kindergarten program" means a pre-kindergarten program as defined in the Pre-Kindergarten Act;

O. "resident" means a person who is domiciled in
New Mexico, including a person who is homeless or who is
temporarily residing in a domestic violence or homeless
shelter; provided that for the purposes of the Child Care
Assistance Program Act, a person may have only one domicile;

P. "tiered quality rating system" means the system
developed by the department to rate the level of quality of a
licensed child care facility; and

Q. "unearned income" means income in the form of
benefits, such as benefits received pursuant to state and
federal programs, child support, pensions, gifts, loans, grants
and other income that is not income received as gross wages
from employment or as profit from self-employment."

SECTION 3. A new section of the Children's Code is
enacted to read:

"[NEW MATERIAL] CHILD CARE ASSISTANCE PROGRAM--ELIGIBILITY REQUIREMENTS.--

A. The "child care assistance program" is created
in the department to provide child care assistance for eligible
children, subject to appropriation. The department shall
promulgate rules necessary to carry out the provisions of the
program.

B. To participate in the child care assistance
program, an application shall be submitted to the department in
the manner and form prescribed by the department. Subject to
the provisions of Subsection C of this section, a person is
eligible for child care assistance if an application is
submitted on behalf of a resident child receiving child care
assistance who is under the age of thirteen years at the time
of application, or under the age of nineteen years if the child
is physically or mentally incapable of caring for the child's
self or is under court supervision. The department shall
redetermine eligibility for child care assistance at a
frequency level aligned with federal regulation.

C. To be eligible to participate in the child care
assistance program, each parent or legal guardian of a child
receiving child care assistance who lives in the household with
the child shall be:

(1) employed;

(2) a full-time student and enrolled in at
least twelve credit hours at an accredited educational
institution;

(3) a part-time student and enrolled in at
least six credit hours at an accredited educational
institution;

(4) enrolled in a certified job training
program or apprenticeship;

(5) receiving aid from the federal temporary
assistance for needy families program;

(6) experiencing homelessness;

(7) under the age of twenty and attending
primary or secondary school;

(8) participating in services pursuant to the
federal Comprehensive Addiction and Recovery Act of 2016
provided by the children, youth and families department; or

(9) engaged in an eligible activity or
exempted from the eligible activity for a reason, including
incapacitation, as determined by department rule and in
accordance with federal regulations.

D. If a parent or legal guardian who applies for
child care assistance has an annual household income greater
than six hundred percent of the federal poverty level, the
eligibility for child care assistance shall be limited to the
hours of care supported by the parent's or legal guardian's
qualifying activity schedule.

E. Eligibility may be granted for up to ninety days
for applicants seeking employment.

F. An application to the department shall include
documentation evidencing that the applicant meets the
requirements to be eligible to participate in the child care
assistance program and shall include documentation of earned
and unearned income. To determine residency in New Mexico, the
applicant shall provide a current New Mexico driver's license
or other documentation proving residence in New Mexico as
determined by department rule.

G. Unless determined necessary by the department, a
child shall not be eligible for child care assistance for the
hours of care in which the child is enrolled in a head start
program or an early head start program or for the hours a child
is eligible for an early pre-kindergarten or a pre-kindergarten
program.

H. The department may make a presumption of
eligibility for the child care assistance program based on
proof of the child's residency and proof of parentage or
guardianship before the documentation required pursuant to
Subsection C of this section is received. Presumption of
eligibility shall not exceed the allowable duration permitted
by the federal government upon initial application."

SECTION 4. A new section of the Children's Code is
enacted to read:

"[NEW MATERIAL] COPAYMENT DETERMINATION.--

A. A parent or legal guardian may be required to
pay a child care facility a copayment for child care services;
provided, however, that the department shall provide a parent
or legal guardian with ninety days' notice prior to the
implementation of a copayment.

B. Beginning after one of the conditions pursuant
to Subsection C of this section is met, and continuing through
the remainder of the applicable fiscal year, the department
shall implement one or more of the following:

(1) a sliding scale payment schedule
applicable to monthly copayments as provided in Subsection D of
this section;

(2) a waitlist as provided in Subsection E of
this section if demand for child care assistance exceeds the
availability of funds within the fiscal year; or

(3) a combination of both Paragraphs (1) and
(2) of this subsection.

C. The department shall implement one or more of
Paragraphs (1) through (3) of Subsection B of this section if,
in a given year, any of the following conditions is met:

(1) the number of children receiving child
care assistance services exceeds that year's projected
enrollment by three percent as determined by the department on
August 1 of each calendar year;

(2) the state recurring general fund revenue
growth percentage is projected to be lower than the percentage
change in the annual consumer price index for all urban
consumers for the prior calendar year as determined by the
consensus revenue estimating group;

(3) the twelve-month average percentage change
in the annual consumer price index for all urban consumers
exceeds three percent;

(4) the average price for west Texas
intermediate crude oil during the applicable fiscal year is
less than fifty dollars ($50.00) per barrel as determined by
the consensus revenue estimating group; or

(5) the department identifies a different or
additional condition.

D. For a sliding scale payment schedule applicable
to monthly copayments pursuant to Paragraph (1) of Subsection B
of this section, the payment schedule shall be implemented to
ensure that the amount appropriated for the child care
assistance program is sufficient to meet the costs of the
program and that a monthly copayment shall not exceed one-twelfth of the percentages provided in Paragraphs (1) through
(3) of this subsection as applied to an applicant's annual
household income. The payment schedule shall be as follows:

(1) copayments for an applicant with an annual
household income of six hundred percent or less of the federal
poverty level shall be waived;

(2) copayments shall be three percent or less
of the annual household income for a household with income
greater than six hundred percent but not exceeding nine hundred
percent of the federal poverty level for all children in care;
provided that the amount shall not exceed twenty-five percent
of the average rate paid for the applicable age group to the
child care facility; and

(3) copayments shall be seven percent or less
of the annual household income for a household with income
greater than nine hundred percent of the federal poverty level
for all children in care; provided that the amount shall not
exceed fifty percent of the average rate paid for the
applicable age group to the child care facility.

E. For a waitlist maintained pursuant to Paragraph
(2) of Subsection B of this section, to avoid a possible
funding deficiency, the department shall prioritize all
available child care assistance for children with developmental
delays or disabilities, at-risk children and children from
birth to age three in households with annual household incomes
of less than four hundred percent of the federal poverty level.

F. The department shall expend federal child care
assistance funds, including required state match and
maintenance of efforts amounts, for federally eligible children
prior to expending state funds for child care assistance. The
department shall reasonably ensure that eligible federal and
state child care tax benefits are maximized.

G. The department shall provide child care
assistance to children aged six through twelve years who are
eligible for federal child care assistance, and the department
shall not exceed thirteen thousand child care assistance slots
for children aged six through twelve years who are not
federally eligible, except as provided for a child through age
eighteen years if that child is under court supervision or is
physically or mentally incapable of self-care. The department
shall maintain a waitlist and prioritize applicants based on
whether an application is for an at-risk child and on families'
annual incomes from lowest to highest percentage of the federal
poverty level."

SECTION 5. A new section of the Children's Code is
enacted to read:

"[NEW MATERIAL] PAYMENT RATES FOR CHILD CARE ASSISTANCE
SERVICES.--

A. Payment rates for the child care assistance
program, including copayments, shall be subject to the
availability of funds and shall be set by rule of the
department and updated as required by federal law. Payment
rates shall:

(1) be based on a cost estimation model in
accordance with the requirements of the federal child care and
development fund program authorized by the federal Child Care
and Development Block Grant Act of 1990, as amended;

(2) correspond to differences in quality based
on the tiered quality rating system of the department;

(3) be sufficient to meet the requirements of
each tier and ensure adequate wages for child care facility
staff;

(4) include thresholds appropriate for each
facility type and age groups of children and full-time, part-time or wrap-around care;

(5) include a differential rate for care that
is provided during nontraditional hours of operation; and

(6) incorporate feedback and input from early
childhood education and development experts, a diverse group of
child care facilities of a variety of facility types, families
and organizations representing child care directors, teachers
and other staff.

B. The department may create an enhanced monthly
rate schedule with a monthly payment rate not to exceed an
average of ten percent above the rate provided in Subsection A
of this section for a child care facility.

C. The portion of the rates used for salaries and
benefits and toward the wage scale and career ladder pursuant
to this section shall be determined by rule of the department."

SECTION 6. A new section of the Children's Code is
enacted to read:

"[NEW MATERIAL] REQUIREMENTS--CHILD CARE FACILITIES--EARLY
INTERVENTION PROVIDERS.--

A. A child care facility that participates in the
child care assistance program shall:

(1) not accept or receive child care
assistance for hours that a child is enrolled in a head start
program or an early head start program or is eligible for an
early pre-kindergarten program or a pre-kindergarten program,
except when determined necessary by the department;

(2) not accept or require payment or donations
in any form from an eligible child's family who is
participating in the child care assistance program for an
eligible child to be admitted or enrolled beyond the rate paid
by the department for the hours paid for through the child care
assistance program;

(3) refer an at-risk child to appropriate
programs of the department for services;

(4) meet and maintain required training as set
by rule of the department to identify and refer at-risk
children to a home visiting and the family, infant, toddler
programs of the department;

(5) meet and maintain required professional
development and certification pathways, as set by rule of the
department;

(6) not unreasonably exclude early
intervention providers from accessing a child care setting to
provide early intervention services. If intervention providers
are excluded for any reason, a facility shall notify the
department within forty-eight hours;

(7) report to the department program
participation, professional qualifications of staff members,
salaries and benefits for each employee and the employee
benefit structure; and

(8) comply with department requirements
promulgated by rule.

B. If a child is referred for early intervention,
an early intervention provider shall not intervene without
express authorization by the parent, legal guardian or
custodian of the child.

C. The department shall create a reporting
mechanism for early intervention providers to report suspected
child abuse or neglect occurring in a child care facility."

SECTION 7. A new section of the Children's Code is
enacted to read:

"[NEW MATERIAL] DEPARTMENT DUTIES--SHARING OF
INFORMATION.--

A. The department shall develop the child care
assistance program to enhance child care quality and improve
the development of participating children. Through the
administration of the child care assistance program, the
department shall promote parental choice, allowing parents to
choose the care that best suits the child's family through a
mixed delivery system that includes public, private, nonprofit,
for-profit and faith-based child care facilities; provided that
systems prohibited by the constitution of New Mexico shall not
be paid from the land grant permanent fund. In carrying out
its duties, the department shall:

(1) implement internal controls that ensure
integrity of and accountability for the child care assistance
program while maintaining continuity of the program; and

(2) report any suspected intentional misuse of
funds to local law enforcement and the local district attorney
or the attorney general for prosecution; provided that upon a
report being made to law enforcement pursuant to this
paragraph, the department shall report the suspected
intentional misuse of funds by the child care facility to the
state auditor, who shall investigate the child care facility.

B. The department shall perform at least two
unannounced visits per year to each child care facility that
shall include a compliance review of the Child Care Assistance
Program Act requirements and compliance with the rules set by
the department.

C. By September 1, 2026 and each September 1
thereafter, the department shall provide to the legislative
health and human services committee and the legislative finance
committee a report on implementation of the Child Care
Assistance Program Act, including costs, a review of the cost
estimation model and payment rates set pursuant to Section 5 of
the Child Care Assistance Program Act, program participation,
children and families served by that act, the distribution of
child care assistance based on income, race or ethnicity by the
tiered quality rating system throughout the state and the
information reported pursuant to Subsection A of Section 6 of
that act.

D. All agencies that are part of the children's
cabinet pursuant to the Children's Cabinet Act shall share data
and other information necessary with the department in order
for the department to carry out the provisions of the Child
Care Assistance Program Act."

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