RETAIN Act

Subjects: Taxation


<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1567 Introduced in Senate (IS)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                S. 1567

 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

                              May 11, 2023

  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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Retaining Educators Takes Added 
Investment Now Act'' or the ``RETAIN Act''.

SEC. 2. PURPOSE.

    The purpose of this Act is to create a refundable tax credit for 
early childhood educators, teachers, early childhood education program 
directors, school leaders, and school-based mental health services 
providers in early childhood, elementary, and secondary education 
settings that rewards retention based on the time spent serving high-
need students.

SEC. 3. FINDINGS.

    Congress finds the following:
            (1) The shortage of experienced, qualified early childhood 
        educators and elementary school and secondary school teachers 
        is a national problem that compromises the academic outcomes 
        and long-term success of students.
            (2) The shortage is the result of many factors including 
        low pay, frequent turnover in school leadership, poor teaching 
        conditions, and inadequate teacher supports.
            (3) The shortage is worse in high-poverty areas where the 
        factors contributing to the shortage are particularly acute and 
        have an increased negative impact on teachers of color 
        remaining in the field.
            (4) A child's access to high-quality early childhood 
        education is critical to supporting positive outcomes, and 
        early childhood educators--
                    (A) play an important role in setting the 
                foundation for future learning, and
                    (B) promote the development of vital skills, 
                habits, and mindsets that children need to be 
                successful in school and in life.
            (5) In 2021, the national median pay of early childhood 
        educators was a mere $30,210, with many early childhood 
        educators relying on government assistance programs such as 
        Medicaid, the supplemental nutrition assistance program 
        established under the Food and Nutrition Act of 2008 (7 U.S.C. 
        2011 et seq.), or the temporary assistance for needy families 
        program established under part A of title IV of the Social 
        Security Act (42 U.S.C. 601 et seq.), and struggling to provide 
        for their own families.
            (6) Studies have demonstrated that well-qualified, 
        experienced teachers are the single most important school-based 
        element contributing to a child's academic achievement and 
        success.
            (7) In the 2021-2022 academic year, the average teacher 
        salary in public elementary schools and secondary schools was 
        only $66,397, a 2 percent increase from the previous academic 
        year. When adjusted for inflation, the average teacher salary 
        has declined by 6.4 percent over the past decade.
            (8) On average, public elementary school and secondary 
        school teachers were paid 23.5 percent less than other college 
        graduates working in non-teaching fields, and many teachers 
        struggle with large amounts of student loan debt.
            (9) In 2021, the average teacher salary for a first-year 
        teacher in a public elementary school or secondary school was 
        $41,770.
            (10) An experienced, well-qualified education workforce 
        must also be reflective of the diversity of the student body 
        across race, ethnicity, and disability.
            (11) Higher pay for teachers can result in a more diverse 
        teacher workforce, and minority students often perform better 
        on standardized tests, have improved attendance, and are 
        suspended less frequently when they have at least one same-race 
        teacher.
            (12) Experienced, well-qualified school leaders and school-
        based mental health service providers are essential for 
        providing strong educational opportunities and services for 
        students and promoting teacher retention through improved 
        professional supports and teaching conditions.
            (13) Between February 2020 and May 2022, at least 300,000 
        teachers at public elementary schools and secondary schools 
        left the field, a nearly 3 percent decline in the teacher 
        workforce.

SEC. 4. REFUNDABLE TAX CREDIT FOR TEACHER AND SCHOOL LEADER RETENTION.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of subtitle A of the Internal Revenue Code of 1986 is amended by 
inserting after section 36B the following new section:

``SEC. 36C. TEACHER AND SCHOOL LEADER RETENTION CREDIT.

    ``(a) Allowance of Credit.--
            ``(1) In general.--In the case of an individual who is 
        employed in a position described in paragraph (2) during a 
        school year ending with or within the taxable year, there shall 
        be allowed as a credit against the tax imposed by this subtitle 
        for the taxable year an amount equal to the applicable amount 
        (as determined under subsection (b)).
            ``(2) Eligible positions.--The positions described in this 
        paragraph shall consist of the following:
                    ``(A) An eligible early childhood educator.
                    ``(B) An eligible early childhood education program 
                director.
                    ``(C) An eligible early childhood education 
                provider.
                    ``(D) An eligible teacher.
                    ``(E) An eligible paraprofessional.
                    ``(F) An eligible school-based mental health 
                services provider.
                    ``(G) An eligible school leader.
    ``(b) Applicable Amount.--
            ``(1) In general.--For purposes of this section, the 
        applicable amount shall be an amount determined based on the 
        number of school years for which the individual has been 
        continuously employed in any position described in subsection 
        (a)(2), as follows:
                    ``(A) Subject to paragraph (2), for the first year 
                of employment, $5,800.
                    ``(B) For the second continuous year of employment, 
                $5,800.
                    ``(C) For the third and fourth continuous year of 
                employment, $7,000.
                    ``(D) For the fifth, sixth, seventh, eighth, and 
                ninth continuous year of employment, $8,700.
                    ``(E) For the tenth continuous year of employment, 
                $11,600.
                    ``(F) For the eleventh, twelfth, thirteenth, 
                fourteenth, and fifteenth continuous year of 
                employment, $8,700.
                    ``(G) For the sixteenth continuous year of 
                employment, $7,000.
                    ``(H) For the seventeenth, eighteenth, nineteenth, 
                and twentieth continuous year of employment, $5,800.
            ``(2) First year.--For purposes of the first year of 
        employment ending with or within a taxable year, an individual 
        must have been so employed for a period of not less than 4 
        months before the first day of such taxable year.
            ``(3) Limitation based on total number of school years.--In 
        the case of any individual who has been employed in any 
        position described in subsection (a)(2) for a total of more 
        than 20 school years, the applicable amount shall be reduced to 
        zero.
    ``(c) Inflation Adjustment.--
            ``(1) In general.--In the case of any taxable year 
        beginning after 2024, each of the dollar amounts in subsection 
        (b)(1) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for such calendar year by 
                substituting `calendar year 2023' for `calendar year 
                2016' in subparagraph (A)(ii) thereof.
            ``(2) Rounding.--If any increase determined under paragraph 
        (1) is not a multiple of $100, such increase shall be rounded 
        to the nearest multiple of $100.
    ``(d) Supplementing, Not Supplanting, State and Local Education 
Funds.--
            ``(1) In general.--A State educational agency or local 
        educational agency shall not reduce or adjust any compensation, 
        or any assistance provided through a loan forgiveness program, 
        to an employee of the State educational agency or local 
        educational agency who serves in any position described in 
        subsection (a)(2) due to the individual's eligibility for the 
        credit under this section.
            ``(2) Methodology.--Upon request by the Secretary of 
        Education, a State educational agency or local educational 
        agency shall reasonably demonstrate that the methodology used 
        to allocate amounts for compensation and for loan forgiveness 
        to the employees described in paragraph (1) at qualifying 
        schools or qualifying early childhood education programs 
        ensures that employees at each qualifying school or qualifying 
        early childhood education program in the State or served by the 
        local educational agency, respectively, receive the same amount 
        of State or local funds for compensation and loan forgiveness 
        that the qualifying school or qualifying early childhood 
        education program would receive if the credit under this 
        section had not been enacted.
    ``(e) Information Sharing.--The Secretary of Education and the 
Secretary of Health and Human Services shall provide the Secretary with 
such information as is necessary for purposes of determining whether an 
early childhood education program or an elementary school or secondary 
school satisfies the requirements for a qualifying early childhood 
education program or a qualifying school, respectively.
    ``(f) Definitions.--For purposes of this section--
            ``(1) ESEA definitions.--The terms `elementary school', 
        `local educational agency', `secondary school', and `State 
        educational agency' have the meanings given the terms in 
        section 8101 of the Elementary and Secondary Education Act of 
        1965 (20 U.S.C. 7801).
            ``(2) Eligible early childhood education program 
        director.--The term `eligible early childhood education program 
        director' means an employee or officer of a qualifying early 
        childhood education program who is responsible for the daily 
        instructional leadership and managerial operations of such 
        program.
            ``(3) Eligible early childhood education provider.--The 
        term `eligible early childhood education provider' means an 
        individual--
                    ``(A) who--
                            ``(i) has an associate's degree or higher 
                        degree in early childhood education or a 
                        related field, or
                            ``(ii) is enrolled during the taxable year 
                        in a program leading to such an associate's or 
                        higher degree and is making satisfactory 
                        progress toward such degree, and
                    ``(B) who is responsible for the daily 
                instructional leadership and managerial operations of a 
                qualifying early childhood education program in a home-
                based setting.
            ``(4) Eligible early childhood educator.--The term 
        `eligible early childhood educator' means an individual--
                    ``(A) who--
                            ``(i) has an associate's degree or higher 
                        degree in early childhood education or a 
                        related field, or
                            ``(ii) is enrolled during the taxable year 
                        in a program leading to such an associate's or 
                        higher degree and is making satisfactory 
                        progress toward such degree,
                    ``(B) who has credentials or a license under State 
                law for early childhood education, as applicable, and
                    ``(C) whose primary responsibility is for the 
                learning and development of children in a qualifying 
                early childhood education program during the taxable 
                year.
            ``(5) Eligible paraprofessional.--The term `eligible 
        paraprofessional' means an individual--
                    ``(A) who is a paraprofessional, as defined in 
                section 3201 of the Elementary and Secondary Education 
                Act of 1965 (20 U.S.C. 7011),
                    ``(B) who meets the applicable State professional 
                standards and qualifications pursuant to section 
                1111(g)(2)(M) of such Act (20 U.S.C. 6311(g)(2)(M)),
                    ``(C) whose primary responsibilities involve 
                working or assisting in a classroom setting, and
                    ``(D) who is employed in a qualifying school or a 
                qualifying early childhood education program.
            ``(6) Eligible school-based mental health services 
        provider.--The term `eligible school-based mental health 
        services provider' means an individual--
                    ``(A) described in section 4102(6) of the 
                Elementary and Secondary Education Act of 1965 (20 
                U.S.C. 7112(6)), and
                    ``(B) who is employed in a qualifying school or a 
                qualifying early childhood education program.
            ``(7) Eligible school leader.--The term `eligible school 
        leader' means a principal, assistant principal, or other 
        individual who is--
                    ``(A) an employee or officer of a qualifying 
                school, and
                    ``(B) responsible for the daily instructional 
                leadership and managerial operations in the qualifying 
                school.
            ``(8) Eligible teacher.--The term `eligible teacher' means 
        an individual who--
                    ``(A) is an elementary school or secondary school 
                teacher who, as determined by the State or local 
                educational agency, is a teacher of record who provides 
                direct classroom teaching (or classroom-type teaching 
                in a nonclassroom setting) to students in a qualifying 
                school, and
                    ``(B)(i) meets applicable State certification and 
                licensure requirements, including any requirements for 
                certification obtained through alternative routes to 
                certification, in the State in which such school is 
                located and in the subject area in which the individual 
                is the teacher of record, or
                    ``(ii) is enrolled during the taxable year in a 
                program leading to State certification and licensure as 
                described in clause (i) and is making satisfactory 
                progress toward such certification and licensure 
                requirements.
            ``(9) Qualifying early childhood education program.--
                    ``(A) In general.--The term `qualifying early 
                childhood education program' means an early childhood 
                education program, as defined in section 103 of the 
                Higher Education Act of 1965 (20 U.S.C. 1003), that, 
                regardless of setting--
                            ``(i) serves children who receive services 
                        for which financial assistance is provided in 
                        accordance with the Child Care and Development 
                        Block Grant Act of 1990 (42 U.S.C. 9857 et 
                        seq.), the Head Start Act (42 U.S.C. 9831 et 
                        seq.), or the child and adult care food program 
                        established under section 17 of the Richard B. 
                        Russell National School Lunch Act (42 U.S.C. 
                        1766), and
                            ``(ii) participates in a State tiered and 
                        transparent system for measuring program 
                        quality.
                    ``(B) Special rule.--Notwithstanding subparagraph 
                (A), an early childhood education program that does not 
                satisfy the requirements of subparagraph (A)(ii) shall 
                be deemed to be a qualifying early childhood education 
                program until September 30, 2023, if the program--
                            ``(i) satisfies all requirements of 
                        subparagraph (A) except for clause (ii) of such 
                        subparagraph, and
                            ``(ii)(I) meets the Head Start program 
                        performance standards described in section 
                        641A(a) of the Head Start Act (42 U.S.C. 
                        9836a(a)), if applicable, or
                            ``(II) is accredited by a national 
                        accreditor of early learning programs as of the 
                        date of enactment of the Retaining Educators 
                        Takes Added Investment Now Act.
            ``(10) Qualifying school.--The term `qualifying school' 
        means--
                    ``(A) a public elementary school or secondary 
                school that--
                            ``(i) is in the school district of a local 
                        educational agency that is eligible for 
                        assistance under part A of title I of the 
                        Elementary and Secondary Education Act of 1965 
                        (20 U.S.C. 6311 et seq.), or
                            ``(ii) is served or operated by an 
                        educational service agency that is eligible for 
                        such assistance, or
                    ``(B) an elementary school or secondary school that 
                is funded by the Bureau of Indian Education and that is 
                in the school district of a local educational agency 
                that is eligible for such assistance.''.
    (b) W-2 Reporting of Continuous Employment for Certain Positions at 
Qualifying Early Childhood Education Programs or Qualifying Schools.--
Section 6051(a) of the Internal Revenue Code of 1986 is amended by 
striking ``and'' at the end of paragraph (16), by striking the period 
at the end of paragraph (17) and inserting ``, and'', and by inserting 
after paragraph (17) the following new paragraph:
            ``(18) in the case of an employee who is employed in a 
        position described in subsection (a)(2) of section 36C, the 
        number of school years for which such employee has been 
        continuously employed in any such position.''.
    (c) Conforming Amendments.--
            (1) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of subtitle A of the Internal Revenue 
        Code of 1986 is amended by inserting after the item relating to 
        section 36B the following:

``Sec. 36C. Teacher and school leader retention credit.''.
            (2) Section 6211(b)(4)(A) of such Code is amended by 
        inserting ``36C,'' after ``36B,''.
            (3) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``36C,'' after ``36B,''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2023.

SEC. 5. DEVELOPING INTERAGENCY DATA SERIES.

    The Secretary of Labor, in coordination with the Secretary of the 
Treasury, the Secretary of Education, and the Secretary of Health and 
Human Services, shall--
            (1) develop and publish on the internet website of the 
        Bureau of Labor Statistics a data series that captures--
                    (A) the average base salary of teachers in 
                elementary schools and secondary schools, disaggregated 
                by--
                            (i) employment in public elementary schools 
                        and secondary schools that receive assistance 
                        under part A of title I of the Elementary and 
                        Secondary Education Act of 1965 (20 U.S.C. 6311 
                        et seq.),
                            (ii) employment in public elementary 
                        schools and secondary schools that do not 
                        receive such assistance, and
                            (iii) geographic region, and
                    (B) the average base salary of early childhood 
                educators, disaggregated by highest level of degree 
                attained, and
            (2) update the data series under paragraph (1) on an annual 
        basis.
                                 &lt;all&gt;
</pre></body></html>