II 

117TH CONGRESS 

1ST SESSION S. 686 

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 SENATE OF THE UNITED STATES 

MARCH 10, 2021 

Mr. DURBIN (for himself, Ms. BALDWIN, and Ms. SMITH) introduced the 

following bill; which was read twice and referred to the Committee on Finance 

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 purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Retaining Educators 

5 Takes Added Investment Now Act’’ or the ‘‘RETAIN 

6 Act’’. 


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1 SEC. 2. PURPOSE. 

2 The purpose of this Act is to create a refundable tax 

3 credit for early childhood educators, teachers, early child4 hood education program directors, school leaders, and 

5 school-based mental health services providers in early 

6 childhood, elementary, and secondary education settings 

7 that rewards retention based on the time spent serving 

8 high-need students. 

9 SEC. 3. FINDINGS. 

10 Congress finds the following: 

11 (1) The shortage of experienced, qualified early 

12 childhood educators and elementary school and sec13 ondary school teachers is a national problem that 

14 compromises the academic outcomes and long-term 

15 success of students. 

16 (2) The shortage is the result of many factors 

17 including low pay, frequent turnover in school lead18 ership, poor teaching conditions, and inadequate 

19 teacher supports. 

20 (3) The shortage is worse in high-poverty areas 

21 where the factors contributing to the shortage are 

22 particularly acute and have an increased negative 

23 impact on teachers of color remaining in the field. 

24 (4) A child’s access to high-quality early child25 hood education is critical to supporting positive out26 comes, and early childhood educators— 


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1 (A) play an important role in setting the 

2 foundation for future learning, and 

3 (B) promote the development of vital skills, 

4 habits, and mindsets that children need to be 

5 successful in school and in life. 

6 (5) In 2019, the national median pay of early 

7 childhood educators was a mere $30,520, with many 

8 early childhood educators relying on government as9 sistance programs such as Medicaid, the supple10 mental nutrition assistance program established 

11 under the Food and Nutrition Act of 2008 (7 U.S.C. 

12 2011 et seq.), or the temporary assistance for needy 

13 families program established under part A of title IV 

14 of the Social Security Act (42 U.S.C. 601 et seq.), 

15 and struggling to provide for their own families. 

16 (6) Studies have demonstrated that well-quali17 fied, experienced teachers are the single most impor18 tant school-based element contributing to a child’s 

19 academic achievement and success. 

20 (7) In 2019, the average teacher salary in pub21 lic elementary schools and secondary schools was 

22 only $64,470, which is on average 19.2 percent less 

23 than other college graduates working in non-teach24 ing fields, and with many teachers struggling with 

25 large amounts of student loan debt. 


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1 (8) An experienced, well-qualified education 

2 workforce must also be reflective of the diversity of 

3 the student body across race, ethnicity, and dis4 ability. 

5 (9) Experienced, well-qualified school leaders 

6 and school-based mental health service providers are 

7 essential for providing strong educational opportuni8 ties and services for students and promoting teacher 

9 retention through improved professional supports 

10 and teaching conditions. 

11 (10) In 2020, surveys found nearly 27 percent 

12 of educators were considering leaving teaching due 

13 to the COVID–19 pandemic, including 55 percent of 

14 teachers with more than 30 years of experience. 

15 SEC. 4. REFUNDABLE TAX CREDIT FOR TEACHER AND 

16 SCHOOL LEADER RETENTION. 

17 (a) IN GENERAL.—Subpart C of part IV of sub18 chapter A of chapter 1 of subtitle A of the Internal Rev19 enue Code of 1986 is amended by inserting after section 

20 36B the following new section: 

21 ‘‘SEC. 36C. TEACHER AND SCHOOL LEADER RETENTION 

22 CREDIT. 

23 ‘‘(a) ALLOWANCE OF CREDIT.— 

24 ‘‘(1) IN GENERAL.—In the case of an individual 

25 who is employed in a position described in paragraph 


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1 (2) during a school year ending with or within the 

2 taxable year, there shall be allowed as a credit 

3 against the tax imposed by this subtitle for the tax4 able year an amount equal to the applicable amount 

5 (as determined under subsection (b)). 

6 ‘‘(2) ELIGIBLE POSITIONS.—The positions de7 scribed in this paragraph shall consist of the fol8 lowing: 

9 ‘‘(A) An eligible early childhood educator. 

10 ‘‘(B) An eligible early childhood education 

11 program director. 

12 ‘‘(C) An eligible early childhood education 

13 provider. 

14 ‘‘(D) An eligible teacher. 

15 ‘‘(E) An eligible paraprofessional. 

16 ‘‘(F) An eligible school-based mental 

17 health services provider. 

18 ‘‘(G) An eligible school leader. 

19 ‘‘(b) APPLICABLE AMOUNT.— 

20 ‘‘(1) IN GENERAL.—For purposes of this sec21 tion, the applicable amount shall be an amount de22 termined based on the number of school years for 

23 which the individual has been continuously employed 

24 in any position described in subsection (a)(2), as fol25 lows: 


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1 ‘‘(A) Subject to paragraph (2), for the first 

2 year of employment, $5,800. 

3 ‘‘(B) For the second continuous year of 

4 employment, $5,800. 

5 ‘‘(C) For the third and fourth continuous 

6 year of employment, $7,000. 

7 ‘‘(D) For the fifth, sixth, seventh, eighth, 

8 and ninth continuous year of employment, 

9 $8,700. 

10 ‘‘(E) For the tenth continuous year of em11 ployment, $11,600. 

12 ‘‘(F) For the eleventh, twelfth, thirteenth, 

13 fourteenth, and fifteenth continuous year of em14 ployment, $8,700. 

15 ‘‘(G) For the sixteenth continuous year of 

16 employment, $7,000. 

17 ‘‘(H) For the seventeenth, eighteenth, 

18 nineteenth, and twentieth continuous year of 

19 employment, $5,800. 

20 ‘‘(2) FIRST YEAR.—For purposes of the first 

21 year of employment ending with or within a taxable 

22 year, an individual must have been so employed for 

23 a period of not less than 4 months before the first 

24 day of such taxable year. 


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1 ‘‘(3) LIMITATION BASED ON TOTAL NUMBER OF

2 SCHOOL YEARS.—In the case of any individual who 

3 has been employed in any position described in sub4 section (a)(2) for a total of more than 20 school 

5 years, the applicable amount shall be reduced to 

6 zero. 

7 ‘‘(c) INFLATION ADJUSTMENT.— 

8 ‘‘(1) IN GENERAL.—In the case of any taxable 

9 year beginning after 2022, each of the dollar 

10 amounts in subsection (b)(1) shall be increased by 

11 an amount equal to— 

12 ‘‘(A) such dollar amount, multiplied by 

13 ‘‘(B) the cost-of-living adjustment deter14 mined under section 1(f)(3) for such calendar 

15 year by substituting ‘calendar year 2021’ for 

16 ‘calendar year 2016’ in subparagraph (A)(ii) 

17 thereof. 

18 ‘‘(2) ROUNDING.—If any increase determined 

19 under paragraph (1) is not a multiple of $100, such 

20 increase shall be rounded to the nearest multiple of 

21 $100. 

22 ‘‘(d) SUPPLEMENTING, NOT SUPPLANTING, STATE

23 AND LOCAL EDUCATION FUNDS.— 

24 ‘‘(1) IN GENERAL.—A State educational agency 

25 or local educational agency shall not reduce or adVerDate Sep 11 2014 01:47 Apr 07, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S686.IS S686

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1 just any compensation, or any assistance provided 

2 through a loan forgiveness program, to an employee 

3 of the State educational agency or local educational 

4 agency who serves in any position described in sub5 section (a)(2) due to the individual’s eligibility for 

6 the credit under this section. 

7 ‘‘(2) METHODOLOGY.—Upon request by the 

8 Secretary of Education, a State educational agency 

9 or local educational agency shall reasonably dem10 onstrate that the methodology used to allocate 

11 amounts for compensation and for loan forgiveness 

12 to the employees described in paragraph (1) at 

13 qualifying schools or qualifying early childhood edu14 cation programs ensures that employees at each 

15 qualifying school or qualifying early childhood edu16 cation program in the State or served by the local 

17 educational agency, respectively, receive the same 

18 amount of State or local funds for compensation and 

19 loan forgiveness that the qualifying school or quali20 fying early childhood education program would re21 ceive if the credit under this section had not been 

22 enacted. 

23 ‘‘(e) INFORMATION SHARING.—The Secretary of 

24 Education and the Secretary of Health and Human Serv25 ices shall provide the Secretary with such information as 


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1 is necessary for purposes of determining whether an early 

2 childhood education program or an elementary school or 

3 secondary school satisfies the requirements for a quali4 fying early childhood education program or a qualifying 

5 school, respectively. 

6 ‘‘(f) DEFINITIONS.—For purposes of this section— 

7 ‘‘(1) ESEA DEFINITIONS.—The terms ‘elemen8 tary school’, ‘local educational agency’, ‘secondary 

9 school’, and ‘State educational agency’ have the 

10 meanings given the terms in section 8101 of the Ele11 mentary and Secondary Education Act of 1965 (20 

12 U.S.C. 7801). 

13 ‘‘(2) ELIGIBLE EARLY CHILDHOOD EDUCATION

14 PROGRAM DIRECTOR.—The term ‘eligible early child15 hood education program director’ means an em16 ployee or officer of a qualifying early childhood edu17 cation program who is responsible for the daily in18 structional leadership and managerial operations of 

19 such program. 

20 ‘‘(3) ELIGIBLE EARLY CHILDHOOD EDUCATION

21 PROVIDER.—The term ‘eligible early childhood edu22 cation provider’ means an individual— 

23 ‘‘(A) who— 


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1 ‘‘(i) has an associate’s degree or high2 er degree in early childhood education or a 

3 related field, or 

4 ‘‘(ii) is enrolled during the taxable 

5 year in a program leading to such an asso6 ciate’s or higher degree and is making sat7 isfactory progress toward such degree, and 

8 ‘‘(B) who is responsible for the daily in9 structional leadership and managerial oper10 ations of a qualifying early childhood education 

11 program in a home-based setting. 

12 ‘‘(4) ELIGIBLE EARLY CHILDHOOD EDUCA13 TOR.—The term ‘eligible early childhood educator’ 

14 means an individual— 

15 ‘‘(A) who— 

16 ‘‘(i) has an associate’s degree or high17 er degree in early childhood education or a 

18 related field, or 

19 ‘‘(ii) is enrolled during the taxable 

20 year in a program leading to such an asso21 ciate’s or higher degree and is making sat22 isfactory progress toward such degree, 

23 ‘‘(B) who has credentials or a license 

24 under State law for early childhood education, 

25 as applicable, and 


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1 ‘‘(C) whose primary responsibility is for 

2 the learning and development of children in a 

3 qualifying early childhood education program 

4 during the taxable year. 

5 ‘‘(5) ELIGIBLE PARAPROFESSIONAL.—The term 

6 ‘eligible paraprofessional’ means an individual— 

7 ‘‘(A) who is a paraprofessional, as defined 

8 in section 3201 of the Elementary and Sec9 ondary Education Act of 1965 (20 U.S.C. 

10 7011), 

11 ‘‘(B) who meets the applicable State pro12 fessional standards and qualifications pursuant 

13 to section 1111(g)(2)(M) of such Act (20 

14 U.S.C. 6311(g)(2)(M)), 

15 ‘‘(C) whose primary responsibilities involve 

16 working or assisting in a classroom setting, and 

17 ‘‘(D) who is employed in a qualifying 

18 school or a qualifying early childhood education 

19 program. 

20 ‘‘(6) ELIGIBLE SCHOOL-BASED MENTAL

21 HEALTH SERVICES PROVIDER.—The term ‘eligible 

22 school-based mental health services provider’ means 

23 an individual— 


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1 ‘‘(A) described in section 4102(6) of the 

2 Elementary and Secondary Education Act of 

3 1965 (20 U.S.C. 7112(6)), and 

4 ‘‘(B) who is employed in a qualifying 

5 school or a qualifying early childhood education 

6 program. 

7 ‘‘(7) ELIGIBLE SCHOOL LEADER.—The term 

8 ‘eligible school leader’ means a principal, assistant 

9 principal, or other individual who is— 

10 ‘‘(A) an employee or officer of a qualifying 

11 school, and 

12 ‘‘(B) responsible for the daily instructional 

13 leadership and managerial operations in the 

14 qualifying school. 

15 ‘‘(8) ELIGIBLE TEACHER.—The term ‘eligible 

16 teacher’ means an individual who— 

17 ‘‘(A) is an elementary school or secondary 

18 school teacher who, as determined by the State 

19 or local educational agency, is a teacher of 

20 record who provides direct classroom teaching 

21 (or classroom-type teaching in a nonclassroom 

22 setting) to students in a qualifying school, and 

23 ‘‘(B) meets applicable State certification 

24 and licensure requirements, including any re25 quirements for certification obtained through 


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1 alternative routes to certification, in the State 

2 in which such school is located and in the sub3 ject area in which the individual is the teacher 

4 of record. 

5 ‘‘(9) QUALIFYING EARLY CHILDHOOD EDU6 CATION PROGRAM.— 

7 ‘‘(A) IN GENERAL.—The term ‘qualifying 

8 early childhood education program’ means an 

9 early childhood education program, as defined 

10 in section 103 of the Higher Education Act of 

11 1965 (20 U.S.C. 1003), that, regardless of set12 ting— 

13 ‘‘(i) serves children who receive serv14 ices for which financial assistance is pro15 vided in accordance with the Child Care 

16 and Development Block Grant Act of 1990 

17 (42 U.S.C. 9857 et seq.), the Head Start 

18 Act (42 U.S.C. 9831 et seq.), or the child 

19 and adult care food program established 

20 under section 17 of the Richard B. Russell 

21 National School Lunch Act (42 U.S.C. 

22 1766), and 

23 ‘‘(ii) participates in a State tiered and 

24 transparent system for measuring program 

25 quality. 


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1 ‘‘(B) SPECIAL RULE.—Notwithstanding 

2 subparagraph (A), an early childhood program 

3 that does not satisfy the requirements of sub4 paragraph (A)(ii) shall be deemed to be a quali5 fying early childhood education program until 

6 September 30, 2021, if the program— 

7 ‘‘(i) satisfies all requirements of sub8 paragraph (A) except for clause (ii) of 

9 such subparagraph, and 

10 ‘‘(ii)(I) meets the Head Start program 

11 performance standards described in section 

12 641A(a) of the Head Start Act (42 U.S.C. 

13 9836a(a)), if applicable, or 

14 ‘‘(II) is accredited by a national 

15 accreditor of early learning programs as of 

16 the date of enactment of the Retaining 

17 Educators Takes Added Investment Now 

18 Act. 

19 ‘‘(10) QUALIFYING SCHOOL.—The term ‘quali20 fying school’ means— 

21 ‘‘(A) a public elementary school or sec22 ondary school that— 

23 ‘‘(i) is in the school district of a local 

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1 mentary and Secondary Education Act of 

2 1965 (20 U.S.C. 6311 et seq.), or 

3 ‘‘(ii) is served or operated by an edu4 cational service agency that is eligible for 

5 such assistance, or 

6 ‘‘(B) an elementary school or secondary 

7 school that is funded by the Bureau of Indian 

8 Education and that is in the school district of 

9 a local educational agency that is eligible for 

10 such assistance.’’. 

11 (b) W–2 REPORTING OF CONTINUOUS EMPLOYMENT

12 FOR CERTAIN POSITIONS AT QUALIFYING EARLY CHILD13 HOOD EDUCATION PROGRAMS OR QUALIFYING

14 SCHOOLS.—Section 6051(a) of the Internal Revenue Code 

15 of 1986 is amended by striking ‘‘and’’ at the end of para16 graph (16), by striking the period at the end of paragraph 

17 (17) and inserting ‘‘, and’’, and by inserting after para18 graph (17) the following new paragraph: 

19 ‘‘(18) in the case of an employee who is em20 ployed in a position described in subsection (a)(2) of 

21 section 36C, the number of school years for which 

22 such employee has been continuously employed in 

23 any such position.’’. 

24 (c) CONFORMING AMENDMENTS.— 


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1 (1) The table of sections for subpart C of part 

2 IV of subchapter A of chapter 1 of subtitle A of the 

3 Internal Revenue Code of 1986 is amended by in4 serting after the item relating to section 36B the fol5 lowing: 

‘‘Sec. 36C. Teacher and school leader retention credit.’’. 

6 (2) Section 6211(b)(4)(A) of such Code is 

7 amended by inserting ‘‘36C,’’ after ‘‘36B,’’. 

8 (3) Paragraph (2) of section 1324(b) of title 

9 31, United States Code, is amended by inserting 

10 ‘‘36C,’’ after ‘‘36B,’’. 

11 (d) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to taxable years beginning after 

13 December 31, 2021. 

14 SEC. 5. DEVELOPING INTERAGENCY DATA SERIES. 

15 The Secretary of Labor, in coordination with the Sec16 retary of the Treasury, the Secretary of Education, and 

17 the Secretary of Health and Human Services, shall— 

18 (1) develop and publish on the internet website 

19 of the Bureau of Labor Statistics a data series that 

20 captures— 

21 (A) the average base salary of teachers in 

22 elementary schools and secondary schools, 

23 disaggregated by— 

24 (i) employment in public elementary 

25 schools and secondary schools that receive 


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1 assistance under part A of title I of the El2 ementary and Secondary Education Act of 

3 1965 (20 U.S.C. 6311 et seq.), 

4 (ii) employment in public elementary 

5 schools and secondary schools that do not 

6 receive such assistance, and 

7 (iii) geographic region, and 

8 (B) the average base salary of early child9 hood educators, disaggregated by highest level 

10 of degree attained, and 

11 (2) update the data series under paragraph (1) 

12 on an annual basis. 

Æ 


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