Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Anaya
LAST UPDATED
ORIGINAL DATE 2/19/2025
SHORT TITLE Federal Benefits for CYFD Custody
BILL
NUMBER House Bill 364
ANALYST Hernandez
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
CYFD
No fiscal
impact
At least $198.5 At least $198.5
At least
$397.0
Nonrecurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Duplicates Senate Bill 283
Sources of Information
LFC Files
Federal Administration for Children and Families (ACF)
Agency Analysis Received From
Health Care Authority (HCA) Agency Analysis was Solicited but Not Received From
Children, Youth and Families Department (CYFD) New Mexico Attorney General Office of Family Representation and Advocacy (OFRA)
SUMMARY
Synopsis of House Bill 364
House Bill 364 (HB364) creates a new section of the Children’s Code (32A-4 et. seq. NMSA
1978), the Federal Benefits for Children in State Custody Act. The bill requires that within sixty
days of a child entering the Children, Youth and Families Department’s (CYFD) custody the
department must determine if the child is receiving or eligible for federal benefits. If the child is
already receiving federal benefits, the department must determine who the child’s representative
payee is. If the child is eligible but not receiving benefits, CYFD must apply on behalf of the
child and appoint a representative payee. Under either circumstance, if CYFD is the
representative payee, the department must establish an “appropriate account” to use and conserve
the child’s federal benefits, provide an annual summary of the amount in the account of the child,
avoid receiving overpayment of federal benefits, and provide the child with financial literacy
regarding the account when the child departs custody. HB364 prevents CYFD from using a
child’s federal benefits to pay for or reimburse the department for any of the costs of the child’s
care. House Bill 364 – Page 2
CYFD is required to submit a report to the interim Legislative Health and Human Services
Committee on September 1, 2026, and every year thereafter, about the number of children
receiving federal benefits, the type of federal benefits, the manner in which those benefits are
conserved, and the amount of federal benefits used and conserved.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
The CYFD has historically used social security and Supplemental Security Income (SSI) benefits
received by children and youth in custody to pay for their care. However, as of FY25, CYFD’s
base budget includes a $1.6 million appropriation to replace federal benefit revenue with general
fund revenue within the Protective Services Program at CYFD.
CYFD analysis for House Bill 254 (HB254), a similar bill to HB364 introduced in the second
session of the fifty-sixth legislature, noted that it would need two FTE to complete reporting
functions outlined in HB254 and estimated operational costs associated with implementation to
be $198.5 thousand. However, LFC staff estimate the department would need to track benefits
for roughly 150 children in custody and is already required by federal law to perform this
function if holding funds in trust. Thus, the estimated need for 2 additional FTE may be higher
than true additional costs.
SIGNIFICANT ISSUES
When a social security and SSI beneficiary is unable to manage or direct their own benefits, the
federal Social Security Administration (SSA) appoints a payee to manage or direct the
management for the beneficiary. In general, children under the age of 18 must have a payee. If a
child’s parent, legal guardian, or other close relative or friend are unable or unwilling to serve, an
organization, such as a state or tribal child welfare agency, may be designated the payee. All
designated payees must use social security and SSI benefits for the “use and benefit” of the
beneficiary, which generally means the beneficiary’s “current maintenance,” such as food,
clothing, shelter, and medical needs. A payee must conserve any benefits not needed for current
maintenance for the beneficiary’s future needs. In FY23, SSA benefits averaged roughly $914
per month.
CYFD previously noted the department cannot control payments made by the SSA, and in the
event overpayments occur, the department must return funds to the SSA. Additionally, SSA has
the sole authority to determine who is the representative payee. However, the federal
Administration for Children and Families (ACF) noted that in general, a single person becomes
ineligible for SSI if they have more than $2,000 in “countable resources.” Some resources do not
count toward this federal limit, such as achieving a better life experience or ABLE Account. In a
August 2023 communication, ACF encouraged child welfare agencies to consider using “all of
the tools at their disposal when conserving youth’s federal benefits.”
House Bill 364 – Page 3
In August 2023, ACF reminded states about how state and tribal agencies that serve as
representative payees for children receiving social security or SSI benefits must manage these
funds and encouraged state and tribal agencies to work with youth and young adults to
understand their benefits, particularly as they transition from foster care.
ACF encourages state and tribal welfare agencies to act within their authority and capacity to
make the best decision for using each child’s social security benefits. SSA monitors and reviews
payments made to payees to prevent misuse.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
Duplicates Senate Bill 283 CYFD.
TECHNICAL ISSUES
On page 5, line 18 should add “interim” prior to “legislative health and human services
committee.”
HCA notes confusion about the type of federal benefits discussed. The term “federal benefits”
should likely be changed to solely capture SSI benefits.
AEH/SL2/rl