II 

116TH CONGRESS 

2D SESSION S. 4314 

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 

JULY 23, 2020 

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 2015, the national median pay of early 

7 childhood educators was a mere $28,570, 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 2016, the average teacher salary in pub21 lic elementary schools and secondary schools was 

22 only $58,950, which is on average 21.4 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 SEC. 4. REFUNDABLE TAX CREDIT FOR TEACHER AND 

12 SCHOOL LEADER RETENTION. 

13 (a) IN GENERAL.—Subpart C of part IV of sub14 chapter A of chapter 1 of subtitle A of the Internal Rev15 enue Code of 1986 is amended by inserting after section 

16 36B the following new section: 

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

18 CREDIT. 

19 ‘‘(a) ALLOWANCE OF CREDIT.— 

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

21 who is employed in a position described in paragraph 

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

23 taxable year, there shall be allowed as a credit 

24 against the tax imposed by this subtitle for the taxVerDate Sep 11 2014 02:37 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4314.IS S4314

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1 able year an amount equal to the applicable amount 

2 (as determined under subsection (b)). 

3 ‘‘(2) ELIGIBLE POSITIONS.—The positions de4 scribed in this paragraph shall consist of the fol5 lowing: 

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

7 ‘‘(B) An eligible early childhood education 

8 program director. 

9 ‘‘(C) An eligible early childhood education 

10 provider. 

11 ‘‘(D) An eligible teacher. 

12 ‘‘(E) An eligible paraprofessional. 

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

14 health services provider. 

15 ‘‘(G) An eligible school leader. 

16 ‘‘(b) APPLICABLE AMOUNT.— 

17 ‘‘(1) IN GENERAL.—For purposes of this sec18 tion, the applicable amount shall be an amount de19 termined based on the number of school years for 

20 which the individual has been continuously employed 

21 in any position described in subsection (a)(2), as fol22 lows: 

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

24 year of employment, $5,800. 


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

2 employment, $5,800. 

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

4 year of employment, $7,000. 

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

6 and ninth continuous year of employment, 

7 $8,700. 

8 ‘‘(E) For the tenth continuous year of em9 ployment, $11,600. 

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

11 fourteenth, and fifteenth continuous year of em12 ployment, $8,700. 

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

14 employment, $7,000. 

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

16 nineteenth, and twentieth continuous year of 

17 employment, $5,800. 

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

19 year of employment ending with or within a taxable 

20 year, an individual must have been so employed for 

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

22 day of such taxable year. 

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

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

25 has been employed in any position described in subVerDate Sep 11 2014 02:37 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4314.IS S4314

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1 section (a)(2) for a total of more than 20 school 

2 years, the applicable amount shall be reduced to 

3 zero. 

4 ‘‘(c) INFLATION ADJUSTMENT.— 

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

6 year beginning after 2021, each of the dollar 

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

8 an amount equal to— 

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

10 ‘‘(B) the cost-of-living adjustment deter11 mined under section 1(f)(3) for such calendar 

12 year by substituting ‘calendar year 2020’ for 

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

14 thereof. 

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

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

17 increase shall be rounded to the nearest multiple of 

18 $100. 

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

20 AND LOCAL EDUCATION FUNDS.— 

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

22 or local educational agency shall not reduce or ad23 just any compensation, or any assistance provided 

24 through a loan forgiveness program, to an employee 

25 of the State educational agency or local educational 


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1 agency who serves in any position described in sub2 section (a)(2) due to the individual’s eligibility for 

3 the credit under this section. 

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

5 Secretary of Education, a State educational agency 

6 or local educational agency shall reasonably dem7 onstrate that the methodology used to allocate 

8 amounts for compensation and for loan forgiveness 

9 to the employees described in paragraph (1) at 

10 qualifying schools or qualifying early childhood edu11 cation programs ensures that employees at each 

12 qualifying school or qualifying early childhood edu13 cation program in the State or served by the local 

14 educational agency, respectively, receive the same 

15 amount of State or local funds for compensation and 

16 loan forgiveness that the qualifying school or quali17 fying early childhood education program would re18 ceive if the credit under this section had not been 

19 enacted. 

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

21 Education and the Secretary of Health and Human Serv22 ices shall provide the Secretary with such information as 

23 is necessary for purposes of determining whether an early 

24 childhood education program or an elementary school or 

25 secondary school satisfies the requirements for a qualiVerDate Sep 11 2014 02:37 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S4314.IS S4314

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1 fying early childhood education program or a qualifying 

2 school, respectively. 

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

4 ‘‘(1) ESEA DEFINITIONS.—The terms ‘elemen5 tary school’, ‘local educational agency’, ‘secondary 

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

7 meanings given the terms in section 8101 of the Ele8 mentary and Secondary Education Act of 1965 (20 

9 U.S.C. 7801). 

10 ‘‘(2) ELIGIBLE EARLY CHILDHOOD EDUCATION

11 PROGRAM DIRECTOR.—The term ‘eligible early child12 hood education program director’ means an em13 ployee or officer of a qualifying early childhood edu14 cation program who is responsible for the daily in15 structional leadership and managerial operations of 

16 such program. 

17 ‘‘(3) ELIGIBLE EARLY CHILDHOOD EDUCATION

18 PROVIDER.—The term ‘eligible early childhood edu19 cation provider’ means an individual— 

20 ‘‘(A) who— 

21 ‘‘(i) has an associate’s degree or high22 er degree in early childhood education or a 

23 related field, or 

24 ‘‘(ii) is enrolled during the taxable 

25 year in a program leading to such an assoVerDate Sep 11 2014 02:37 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S4314.IS S4314

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1 ciate’s or higher degree and is making sat2 isfactory progress toward such degree, and 

3 ‘‘(B) who is responsible for the daily in4 structional leadership and managerial oper5 ations of a qualifying early childhood education 

6 program in a home-based setting. 

7 ‘‘(4) ELIGIBLE EARLY CHILDHOOD EDUCA8 TOR.—The term ‘eligible early childhood educator’ 

9 means an individual— 

10 ‘‘(A) who— 

11 ‘‘(i) has an associate’s degree or high12 er degree in early childhood education or a 

13 related field, or 

14 ‘‘(ii) is enrolled during the taxable 

15 year in a program leading to such an asso16 ciate’s or higher degree and is making sat17 isfactory progress toward such degree, 

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

19 under State law for early childhood education, 

20 as applicable, and 

21 ‘‘(C) whose primary responsibility is for 

22 the learning and development of children in a 

23 qualifying early childhood education program 

24 during the taxable year. 


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

2 ‘eligible paraprofessional’ means an individual— 

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

4 in section 3201 of the Elementary and Sec5 ondary Education Act of 1965 (20 U.S.C. 

6 7011), 

7 ‘‘(B) who meets the applicable State pro8 fessional standards and qualifications pursuant 

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

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

11 ‘‘(C) whose primary responsibilities involve 

12 working or assisting in a classroom setting, and 

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

14 school or a qualifying early childhood education 

15 program. 

16 ‘‘(6) ELIGIBLE SCHOOL-BASED MENTAL

17 HEALTH SERVICES PROVIDER.—The term ‘eligible 

18 school-based mental health services provider’ means 

19 an individual— 

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

21 Elementary and Secondary Education Act of 

22 1965 (20 U.S.C. 7112(6)), and 

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

24 school or a qualifying early childhood education 

25 program. 


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

2 ‘eligible school leader’ means a principal, assistant 

3 principal, or other individual who is— 

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

5 school, and 

6 ‘‘(B) responsible for the daily instructional 

7 leadership and managerial operations in the 

8 qualifying school. 

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

10 teacher’ means an individual who— 

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

12 school teacher who, as determined by the State 

13 or local educational agency, is a teacher of 

14 record who provides direct classroom teaching 

15 (or classroom-type teaching in a nonclassroom 

16 setting) to students in a qualifying school, and 

17 ‘‘(B) meets applicable State certification 

18 and licensure requirements, including any re19 quirements for certification obtained through 

20 alternative routes to certification, in the State 

21 in which such school is located and in the sub22 ject area in which the individual is the teacher 

23 of record. 

24 ‘‘(9) QUALIFYING EARLY CHILDHOOD EDU25 CATION PROGRAM.— 


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

2 early childhood education program’ means an 

3 early childhood education program, as defined 

4 in section 103 of the Higher Education Act of 

5 1965 (20 U.S.C. 1003), that, regardless of set6 ting— 

7 ‘‘(i) serves children who receive serv8 ices for which financial assistance is pro9 vided in accordance with the Child Care 

10 and Development Block Grant Act of 1990 

11 (42 U.S.C. 9858 et seq.), the Head Start 

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

13 and adult care food program established 

14 under section 17 of the Richard B. Russell 

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

16 1766), and 

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

18 transparent system for measuring program 

19 quality. 

20 ‘‘(B) SPECIAL RULE.—Notwithstanding 

21 subparagraph (A), an early childhood program 

22 that does not satisfy the requirements of sub23 paragraph (A)(ii) shall be deemed to be a quali24 fying early childhood education program until 

25 September 30, 2021, if the program— 


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1 ‘‘(i) satisfies all requirements of sub2 paragraph (A) except for clause (ii) of 

3 such subparagraph, and 

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

5 performance standards described in section 

6 641A(a) of the Head Start Act (42 U.S.C. 

7 983a(a)), if applicable, or 

8 ‘‘(II) is accredited by a national 

9 accreditor of early learning programs as of 

10 the date of enactment of the Retaining 

11 Educators Takes Added Investment Now 

12 Act. 

13 ‘‘(10) QUALIFYING SCHOOL.—The term ‘quali14 fying school’ means— 

15 ‘‘(A) a public elementary school or sec16 ondary school that— 

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

18 educational agency that is eligible for as19 sistance under part A of title I of the Ele20 mentary and Secondary Education Act of 

21 1965 (20 U.S.C. 6311 et seq.), or 

22 ‘‘(ii) is served or operated by an edu23 cational service agency that is eligible for 

24 such assistance, or 


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1 ‘‘(B) an elementary school or secondary 

2 school that is funded by the Bureau of Indian 

3 Education and that is in the school district of 

4 a local educational agency that is eligible for 

5 such assistance.’’. 

6 (b) W–2 REPORTING OF CONTINUOUS EMPLOYMENT

7 FOR CERTAIN POSITIONS AT QUALIFYING EARLY CHILD8 HOOD EDUCATION PROGRAMS OR QUALIFYING

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

10 of 1986 is amended by striking ‘‘and’’ at the end of para11 graph (16), by striking the period at the end of paragraph 

12 (17) and inserting ‘‘, and’’, and by inserting after para13 graph (17) the following new paragraph: 

14 ‘‘(18) in the case of an employee who is em15 ployed in a position described in subsection (a)(2) of 

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

17 such employee has been continuously employed in 

18 any such position.’’. 

19 (c) CONFORMING AMENDMENTS.— 

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

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

22 Internal Revenue Code of 1986 is amended by in23 serting after the item relating to section 36B the fol24 lowing: 

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


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

2 amended by striking ‘‘and 36B, 168(k)(4)’’ and in3 serting ‘‘36B, and 36C’’. 

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

5 31, United States Code, is amended by inserting 

6 ‘‘36C,’’ after ‘‘36B,’’. 

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

8 this section shall apply to taxable years beginning after 

9 December 31, 2020. 

10 SEC. 5. DEVELOPING INTERAGENCY DATA SERIES. 

11 The Secretary of Labor, in coordination with the Sec12 retary of Treasury, the Secretary of Education, and the 

13 Secretary of Health and Human Services, shall— 

14 (1) develop and publish on the internet website 

15 of the Bureau of Labor Statistics a data series that 

16 captures— 

17 (A) the average base salary of teachers in 

18 elementary schools and secondary schools, 

19 disaggregated by— 

20 (i) employment in public elementary 

21 schools and secondary schools that receive 

22 assistance under part A of title I of the El23 ementary and Secondary Education Act of 

24 1965 (20 U.S.C. 6311 et seq.), 


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1 (ii) employment in public elementary 

2 schools and secondary schools that do not 

3 receive such assistance, and 

4 (iii) geographic region, and 

5 (B) the average base salary of early child6 hood educators, disaggregated by highest level 

7 of degree attained, and 

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

9 on an annual basis. 

Æ 


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