Education Secretary Arne Duncan will pick the grant winners.
The other first-round finalists are Colorado, Delaware, the District of Columbia, Georgia, Illinois, Kentucky, Louisiana, Massachusetts, North Carolina, Ohio, Rhode Island, South Carolina and Tennessee.

The first-round winners will be announced on April 1. Forty states and the District of Columbia submitted proposals. There are expected to be only a handful of winners in the first round.

Under the rules, the awards that states are likely to win vary according to the size of their student populations. According to those guidelines, Florida and New York could win $350 million to $700 million; Georgia, Illinois, North Carolina, Ohio and Pennsylvania could win $200 million to $400 million; and Indiana, Massachusetts and Tennessee could win $150 million to $250 million.

In addition, Colorado, Kentucky, Louisiana, and South Carolina might win $60 million to $75 million, and Delaware, the District of Columbia and Rhode Island might win $20 million to $75 million.

But since those rules are nonbinding, Education Secretary Arne Duncan has the power to apportion winnings any way he wishes. "These states are an example for the country of what is possible when adults come together to do the right thing for children," Mr. Duncan said Thursday.

States that do not win first-round money can reapply by June 1 for a second round.

In their proposals, states had to document their efforts to make changes in educational policy supported by the Obama administration, like integrating what the administration calls "career-ready standards" and new tests into their school systems, building better teacher evaluation systems, creating school data systems that can track student achievement, intervening in failing schools and eliminating caps on charter schools.

Critics have said the administration has taken the federal role in education far beyond what is proper; Gov. Rick Perry of Texas, a Republican, refused to participate on those grounds.

In providing money for the competition in the economic stimulus bill last year, Congress gave Mr. Duncan the power to pick the winning states. Mr. Duncan and his staff set up an elaborate judging process, and sought help from dozens of reviewers - most of them former superintendents, principals and other educators - to read the proposals. After each application was read by five reviewers and scored on a 500-point scale, the rankings were forwarded to Mr. Duncan, officials said.

But Mr. Duncan can pick winners out of order if he wants, officials said.

New York's placement among the finalists had been anything but certain, even though Mr. Duncan has frequently praised New York City's school improvement efforts under Mayor Michael R. Bloomberg. But the competition barred states with laws that prohibit the use of student achievement data to evaluate teachers, and New York has a law that seemed to fit that criteria. But the state argued that the law banned the use of such data only in making teacher tenure decisions. The law sunsets at the end of June.

Merryl H. Tisch, chancellor of the state Board of Regents, said Thursday that she believed the Legislature needed to pass a law raising the state's cap on charter schools before New York could be awarded money.

Even if the Legislature raises the cap in the coming weeks, however, that will not improve New York's chances for a first-round award on June 1, Department of Education officials said.

Many analysts had identified Florida and Louisiana as strong contenders. Florida has one of the most advanced student-data tracking systems in the country, as well as a system that rates schools like report cards, A through F. Louisiana was an obvious contender, partly because scores of charter schools opened in New Orleans after the city's school system was devastated by Hurricane Katrina.

President Obama last month requested an additional $1.3 billion to extend the competition into a third round next year. And in a meeting with governors last month, Mr. Duncan said the administration hoped to extend it even further.

"We want to come back round after round," Mr. Duncan told the governors, adding, "We'd love to see this four, five, six years out - just keep growing it."

Some critics think those plans are premature.

"We haven't seen any results," said Representative John Kline of Minnesota, the ranking Republican on the House Education and Labor Committee. "Let's see what states get approved, which states get left out. There are a whole bunch of unanswered questions."

By SAM DILLON
Published: March 4, 2010

A version of this article appeared in print on March 5, 2010, on page A15 of the New York edition.

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