H.R. 3308

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3308 Introduced in House (IH)]

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119th CONGRESS
1st Session
H. R. 3308

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 8, 2025

Mr. Schneider (for himself and Ms. Stevens) introduced the following 
bill; which was referred to the Committee on Ways and Means, and in 
addition to the Committee on Education and Workforce, for a period to 
be subsequently determined by the Speaker, in each case for 
consideration 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 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 2023-2024 academic year, the average teacher 
salary in public elementary schools and secondary schools was 
only $72,030. 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 the 2023-2024 academic year, the average teacher 
salary for a first-year teacher in a public elementary school 
or secondary school was $46,526.
(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 2026, 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 2025' 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, 2025, 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, 2025.

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.
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