RETAIN Act

I 118TH CONGRESS 1ST SESSION H. R. 3265 To amend the Internal Revenue Code of 1986 to address the teacher and school leader shortage in early childhood, elementary, and secondary education, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 11, 2023 Mr. SCHNEIDER (for himself and Ms. STEVENS) introduced the following bill; which was referred to the Committee on Ways and Means, and in addi- tion to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consider- ation of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Internal Revenue Code of 1986 to address the teacher and school leader shortage in early childhood, elementary, and secondary education, and for other pur- poses. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Retaining Educators 4 Takes Added Investment Now Act’’ or the ‘‘RETAIN 5 Act’’. 6 VerDate Sep 11 2014 05:52 May 23, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3265.IH H3265 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 3265 IH SEC. 2. PURPOSE. 1 The purpose of this Act is to create a refundable tax 2 credit for early childhood educators, teachers, early child- 3 hood education program directors, school leaders, and 4 school-based mental health services providers in early 5 childhood, elementary, and secondary education settings 6 that rewards retention based on the time spent serving 7 high-need students. 8 SEC. 3. FINDINGS. 9 Congress finds the following: 10 (1) The shortage of experienced, qualified early 11 childhood educators and elementary school and sec- 12 ondary school teachers is a national problem that 13 compromises the academic outcomes and long-term 14 success of students. 15 (2) The shortage is the result of many factors 16 including low pay, frequent turnover in school lead- 17 ership, poor teaching conditions, and inadequate 18 teacher supports. 19 (3) The shortage is worse in high-poverty areas 20 where the factors contributing to the shortage are 21 particularly acute and have an increased negative 22 impact on teachers of color remaining in the field. 23 (4) A child’s access to high-quality early child- 24 hood education is critical to supporting positive out- 25 comes, and early childhood educators— 26 VerDate Sep 11 2014 05:52 May 23, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3265.IH H3265 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 3265 IH (A) play an important role in setting the 1 foundation for future learning, and 2 (B) promote the development of vital skills, 3 habits, and mindsets that children need to be 4 successful in school and in life. 5 (5) In 2021, the national median pay of early 6 childhood educators was a mere $30,210, with many 7 early childhood educators relying on government as- 8 sistance programs such as Medicaid, the supple- 9 mental nutrition assistance program established 10 under the Food and Nutrition Act of 2008 (7 U.S.C. 11 2011 et seq.), or the temporary assistance for needy 12 families program established under part A of title IV 13 of the Social Security Act (42 U.S.C. 601 et seq.), 14 and struggling to provide for their own families. 15 (6) Studies have demonstrated that well-quali- 16 fied, experienced teachers are the single most impor- 17 tant school-based element contributing to a child’s 18 academic achievement and success. 19 (7) In the 2021–2022 academic year, the aver- 20 age teacher salary in public elementary schools and 21 secondary schools was only $66,397, a 2 percent in- 22 crease from the previous academic year. When ad- 23 justed for inflation, the average teacher salary has 24 declined by 6.4 percent over the past decade. 25 VerDate Sep 11 2014 05:52 May 23, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3265.IH H3265 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 3265 IH (8) On average, public elementary school and 1 secondary school teachers were paid 23.5 percent 2 less than other college graduates working in non- 3 teaching fields, and many teachers struggle with 4 large amounts of student loan debt. 5 (9) In 2021, the average teacher salary for a 6 first-year teacher in a public elementary school or 7 secondary school was $41,770. 8 (10) An experienced, well-qualified education 9 workforce must also be reflective of the diversity of 10 the student body across race, ethnicity, and dis- 11 ability. 12 (11) Higher pay for teachers can result in a 13 more diverse teacher workforce, and minority stu- 14 dents often perform better on standardized tests, 15 have improved attendance, and are suspended less 16 frequently when they have at least one same-race 17 teacher. 18 (12) Experienced, well-qualified school leaders 19 and school-based mental health service providers are 20 essential for providing strong educational opportuni- 21 ties and services for students and promoting teacher 22 retention through improved professional supports 23 and teaching conditions. 24 VerDate Sep 11 2014 05:52 May 23, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3265.IH H3265 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 3265 IH (13) Between February 2020 and May 2022, at 1 least 300,000 teachers at public elementary schools 2 and secondary schools left the field, a nearly 3 per- 3 cent decline in the teacher workforce. 4 SEC. 4. REFUNDABLE TAX CREDIT FOR TEACHER AND 5 SCHOOL LEADER RETENTION. 6 (a) IN GENERAL.—Subpart C of part IV of sub- 7 chapter A of chapter 1 of subtitle A of the Internal Rev- 8 enue Code of 1986 is amended by inserting after section 9 36B the following new section: 10 ‘‘SEC. 36C. TEACHER AND SCHOOL LEADER RETENTION 11 CREDIT. 12 ‘‘(a) ALLOWANCE OF CREDIT.— 13 ‘‘(1) IN GENERAL.—In the case of an individual 14 who is employed in a position described in paragraph 15 (2) during a school year ending with or within the 16 taxable year, there shall be allowed as a credit 17 against the tax imposed by this subtitle for the tax- 18 able year an amount equal to the applicable amount 19 (as determined under subsection (b)). 20 ‘‘(2) ELIGIBLE POSITIONS.—The positions de- 21 scribed in this paragraph shall consist of the fol- 22 lowing: 23 ‘‘(A) An eligible early childhood educator. 24 VerDate Sep 11 2014 05:52 May 23, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3265.IH H3265 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 3265 IH ‘‘(B) An eligible early childhood education 1 program director. 2 ‘‘(C) An eligible early childhood education 3 provider. 4 ‘‘(D) An eligible teacher. 5 ‘‘(E) An eligible paraprofessional. 6 ‘‘(F) An eligible school-based mental 7 health services provider. 8 ‘‘(G) An eligible school leader. 9 ‘‘(b) APPLICABLE AMOUNT.— 10 ‘‘(1) IN GENERAL.—For purposes of this sec- 11 tion, the applicable amount shall be an amount de- 12 termined based on the number of school years for 13 which the individual has been continuously employed 14 in any position described in subsection (a)(2), as fol- 15 lows: 16 ‘‘(A) Subject to paragraph (2), for the first 17 year of employment, $5,800. 18 ‘‘(B) For the second continuous year of 19 employment, $5,800. 20 ‘‘(C) For the third and fourth continuous 21 year of employment, $7,000. 22 ‘‘(D) For the fifth, sixth, seventh, eighth, 23 and ninth continuous year of employment, 24 $8,700. 25 VerDate Sep 11 2014 05:52 May 23, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3265.IH H3265 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •HR 3265 IH ‘‘(E) For the tenth continuous year of em- 1 ployment, $11,600. 2 ‘‘(F) For the eleventh, twelfth, thirteenth, 3 fourteenth, and fifteenth continuous year of em- 4 ployment, $8,700. 5 ‘‘(G) For the sixteenth continuous year of 6 employment, $7,000. 7 ‘‘(H) For the seventeenth, eighteenth, 8 nineteenth, and twentieth continuous year of 9 employment, $5,800. 10 ‘‘(2) FIRST YEAR.—For purposes of the first 11 year of employment ending with or within a taxable 12 year, an individual must have been so employed for 13 a period of not less than 4 months before the first 14 day of such taxable year. 15 ‘‘(3) LIMITATION BASED ON TOTAL NUMBER OF 16 SCHOOL YEARS.—In the case of any individual who 17 has been employed in any position described in sub- 18 section (a)(2) for a total of more than 20 school 19 years, the applicable amount shall be reduced to 20 zero. 21 ‘‘(c) INFLATION ADJUSTMENT.— 22 ‘‘(1) IN GENERAL.—In the case of any taxable 23 year beginning after 2024, each of the dollar 24 VerDate Sep 11 2014 05:52 May 23, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3265.IH H3265 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •HR 3265 IH amounts in subsection (b)(1) shall be increased by 1 an amount equal to— 2 ‘‘(A) such dollar amount, multiplied by 3 ‘‘(B) the cost-of-living adjustment deter- 4 mined under section 1(f)(3) for such calendar 5 year by substituting ‘calendar year 2023’ for 6 ‘calendar year 2016’ in subparagraph (A)(ii) 7 thereof. 8 ‘‘(2) ROUNDING.—If any increase determined 9 under paragraph (1) is not a multiple of $100, such 10 increase shall be rounded to the nearest multiple of 11 $100. 12 ‘‘(d) SUPPLEMENTING, NOT SUPPLANTING, STATE 13 AND LOCAL EDUCATION FUNDS.— 14 ‘‘(1) IN GENERAL.—A State educational agency 15 or local educational agency shall not reduce or ad- 16 just any compensation, or any assistance provided 17 through a loan forgiveness program, to an employee 18 of the State educational agency or local educational 19 agency who serves in any position described in sub- 20 section (a)(2) due to the individual’s eligibility for 21 the credit under this section. 22 ‘‘(2) METHODOLOGY.—Upon request by the 23 Secretary of Education, a State educational agency 24 or local educational agency shall reasonably dem- 25 VerDate Sep 11 2014 05:52 May 23, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3265.IH H3265 pbinns on DSKJLVW7X2PROD with $$_JOB 9 •HR 3265 IH onstrate that the methodology used to allocate 1 amounts for compensation and for loan forgiveness 2 to the employees described in paragraph (1) at 3 qualifying schools or qualifying early childhood edu- 4 cation programs ensures that employees at each 5 qualifying school or qualifying early childhood edu- 6 cation program in the State or served by the local 7 educational agency, respectively, receive the same 8 amount of State or local funds for compensation and 9 loan forgiveness that the qualifying school or quali- 10 fying early childhood education program would re- 11 ceive if the credit under this section had not been 12 enacted. 13 ‘‘(e) INFORMATION SHARING.—The Secretary of 14 Education and the Secretary of Health and Human Serv- 15 ices shall provide the Secretary with such information as 16 is necessary for purposes of determining whether an early 17 childhood education program or an elementary school or 18 secondary school satisfies the requirements for a quali- 19 fying early childhood education program or a qualifying 20 school, respectively. 21 ‘‘(f) DEFINITIONS.—For purposes of this section— 22 ‘‘(1) ESEA DEFINITIONS.—The terms ‘elemen- 23 tary school’, ‘local educational agency’, ‘secondary 24 school’, and ‘State educational agency’ have the 25 VerDate Sep 11 2014 05:52 May 23, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3265.IH H3265 pbinns on DSKJLVW7X2PROD with $$_JOB 10 •HR 3265 IH meanings given the terms in section 8101 of the Ele- 1 mentary and Secondary Education Act of 1965 (20 2 U.S.C. 7801). 3 ‘‘(2) ELIGIBLE EARLY CHILDHOOD EDUCATION 4 PROGRAM DIRECTOR.—The term ‘eligible early child- 5 hood education program director’ means an em- 6 ployee or officer of a qualifying early childhood edu- 7 cation program who is responsible for the daily in- 8 structional leadership and managerial operations of 9 such program. 10 ‘‘(3) ELIGIBLE EARLY CHILDHOOD EDUCATION 11 PROVIDER.—The term ‘eligible early childhood edu- 12 cation provider’ means an individual— 13 ‘‘(A) who— 14 ‘‘(i) has an associate’s degree or high- 15 er degree in early childhood education or a 16 related field, or 17 ‘‘(ii) is enrolled during the taxable 18 year in a program leading to such an asso- 19 ciate’s or higher degree and is making sat- 20 isfactory progress toward such degree, and 21 ‘‘(B) who is responsible for the daily in- 22 structional leadership and managerial oper- 23 ations of a qualifying early childhood education 24 program in a home-based setting. 25 VerDate Sep 11 2014 05:52 May 23, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3265.IH H3265 pbinns on DSKJLVW7X2PROD with $$_JOB 11 •HR 3265 IH ‘‘(4) ELIGIBLE EARLY CHILDHOOD EDUCA- 1 TOR.—The term ‘eligible early childhood educator’ 2 means an individual— 3 ‘‘(A) who— 4 ‘‘(i) has an associate’s degree or high- 5 er degree in early childhood education or a 6 related field, or 7 ‘‘(ii) is enrolled during the taxable 8 year in a program leading to such an asso- 9 ciate’s or higher degree and is making sat- 10 isfactory progress toward such degree, 11 ‘‘(B) who has credentials or a license 12 under State law for early childhood education, 13 as applicable, and 14 ‘‘(C) whose primary responsibility is for 15 the learning and development of children in a 16 qualifying early childhood education program 17 during the taxable year. 18 ‘‘(5) ELIGIBLE PARAPROFESSIONAL.—The term 19 ‘eligible paraprofessional’ means an individual— 20 ‘‘(A) who is a paraprofessional, as defined 21 in section 3201 of the Elementary and Sec- 22 ondary Education Act of 1965 (20 U.S.C. 23 7011), 24 VerDate Sep 11 2014 05:52 May 23, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3265.IH H3265 pbinns on DSKJLVW7X2PROD with $$_JOB 12 •HR 3265 IH ‘‘(B) who meets the applicable State pro- 1 fessional standards and qualifications pursuant 2 to section 1111(g)(2)(M) of such Act (20 3 U.S.C. 6311(g)(2)(M)), 4 ‘‘(C) whose primary responsibilities involve 5 working or assisting in a classroom setting, and 6 ‘‘(D) who is employed in a qualifying 7 school or a qualifying early childhood education 8 program. 9 ‘‘(6) ELIGIBLE SCHOOL-BASED MENTAL 10 HEALTH SERVICES PROVIDER.—The term ‘eligible 11 school-based mental health services provider’ means 12 an individual— 13 ‘‘(A) described in section 4102(6) of the 14 Elementary and Secondary Education Act of 15 1965 (20 U.S.C. 7112(6)), and 16 ‘‘(B) who is employed in a qualifying 17 school or a qualifying early childhood education 18 program. 19 ‘‘(7) ELIGIBLE SCHOOL LEADER.—The term 20 ‘eligible school leader’ means a principal, assistant 21 principal, or other indiv [Text truncated for display. 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