SEC. 2. FINDINGS AND PURPOSES. 
(a) FINDINGS.—Congress makes the following find-
ings: 
(1) An estimated 2,000,000 new teachers will 
be needed over the next decade. 
(2) Under the No Child Left Behind Act of 
2001, States must recruit qualified teachers by 
2006, yet schools in rural areas and public schools 
with high poverty have trouble attracting and retain-
ing teachers. 
(3) Fourteen percent of America’s school chil-
dren attend rural schools, and according to the 
Rural School and Community Trust 2000 report, 
‘‘Why Rural Matters’’, rural education is crucial or 
very important to overall education performance in 
25 States, so recruitment and retention of teachers 
is essential. 
(4) A 2000 study by the Education Trust re-
ports that high poverty schools are twice as likely 
not to have teachers certified in their fields than 
other schools, which highlights that high poverty 
schools will need special help to meet the goals of 
the No Child Left Behind Act of 2001. 
(5) The National Board for Professional Teach-
ing Standards was founded in 1987 as a follow up 
to the landmark 1983 report, ‘‘A Nation at Risk’’,
by the Carnegie Task Force on Teaching. The Na-
tional Board for Professional Teaching Standards is 
an independent, nonprofit, and nonpartisan organi-
zation the mission of which is to establish high and 
rigorous standards for what accomplished teachers 
should know and be able to do. 
(6) Over 16,000 teachers from all 50 States 
and the District of Columbia have completed certifi-
cation by the National Board for Professional 
Teaching Standards, which certification is a rigorous 
assessment process for teachers. 
(7) Recent data from the Accomplished Teach-
ing Validation Study have demonstrated that teach-
ers who are certified by the National Board for Pro-
fessional Teaching Standards significantly out-
perform their peers who are not National Board cer-
tified on 11 of 13 key measures of teaching exper-
tise. 
(8) Teacher salaries have remained stagnant 
over the past decade, according to a study by the 
National Education Association, and 2⁄3 of the 
States do not meet the national average of $40,582 
for teacher salaries. 
(b) PURPOSES.—The purposes of this Act are as fol-
lows:
(1) To encourage teachers, through a refund-
able tax credit, to work in public elementary and 
secondary schools located in rural areas or schools 
with high poverty. 
(2) To provide an additional tax credit to teach-
ers who achieve certification from the National 
Board for Professional Teaching Standards in order 
to recruit and retain highly qualified teachers in 
public elementary and secondary schools. 
SEC. 3. REFUNDABLE TAX CREDIT FOR INDIVIDUALS 
TEACHING IN ELEMENTARY AND SECONDARY 
SCHOOLS LOCATED IN HIGH POVERTY OR 
RURAL AREAS AND CERTIFIED TEACHERS. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to refundable credits) is amended by redes-
ignating section 36 as section 37 and by inserting after 
section 35 the following new section: 
‘‘SEC. 36. TAX CREDIT FOR INDIVIDUALS TEACHING IN ELE-
MENTARY AND SECONDARY SCHOOLS LO-
CATED IN HIGH POVERTY OR RURAL AREAS 
AND CERTIFIED TEACHERS. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli-
gible teacher, 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 for the eligible aca-
demic year ending during such taxable year. 
‘‘(b) APPLICABLE AMOUNT.—For purposes of this 
section—
‘‘(1) TEACHERS IN SCHOOLS IN RURAL AREAS 
OR SCHOOLS WITH HIGH POVERTY.—
‘‘(A) IN GENERAL.—In the case of an eligi-
ble teacher who performs services in a public 
kindergarten or a public elementary or sec-
ondary school described in subparagraph (B) 
during the eligible academic year, the applicable 
amount is $1,000. 
‘‘(B) SCHOOL DESCRIBED.—A public kin-
dergarten or a public elementary or secondary 
school is described in this subparagraph if—
‘‘(i) at least 75 percent of the stu-
dents attending such kindergarten or 
school receive free or reduced-cost lunches 
under the school lunch program established 
under the Richard B. Russell National 
School Lunch Act, or 
‘‘(ii) such kindergarten or school has 
a School Locale Code of 7 or 8, as deter-
mined by the Secretary of Education.
‘‘(2) CERTIFIED TEACHERS.—In the case of an 
eligible teacher who is certified by the National 
Board for Professional Teaching Standards for the 
eligible academic year, the applicable amount is 
$1,000. 
‘‘(3) CERTIFIED
TEACHERS
IN
SCHOOLS
IN 
RURAL AREAS OR SCHOOLS WITH HIGH POVERTY.—
In the case of an eligible teacher described in para-
graphs (1) and (2), the applicable amount is $2,000. 
‘‘(c) ELIGIBLE TEACHER.—For purposes of this sec-
tion, the term ‘eligible teacher’ means, for any eligible aca-
demic year, an individual who is a kindergarten through 
grade 12 classroom teacher or instructor in a public kin-
dergarten or a public elementary or secondary school on 
a full-time basis for such eligible academic year. 
‘‘(d) ADDITIONAL DEFINITIONS.—For purposes of 
this section—
‘‘(1) 
ELEMENTARY
AND
SECONDARY 
SCHOOLS.—The terms ‘elementary school’ and ‘sec-
ondary school’ have the respective meanings given 
such terms by section 9101 of the Elementary and 
Secondary Education Act of 1965. 
‘‘(2) ELIGIBLE ACADEMIC YEAR.—The term ‘el-
igible academic year’ means any academic year end-
ing in a taxable year beginning after December 31, 
2003.’’. 
(b) CONFORMING AMENDMENTS.—
(1) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting be-
fore the period ‘‘, or from section 36 of such Code’’. 
(2) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 of the Internal Rev-
enue Code of 1986 is amended by striking the item 
relating to section 36 and inserting the following 
new items:
‘‘36. Tax credit for individuals teaching in elementary and secondary schools lo-
cated in high poverty or rural areas and certified teachers. 
‘‘37. Overpayments of tax.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to academic years ending in tax-
able years beginning after December 31, 2003.
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