The U.S. Department of Education's competitive grant program to spur states to reform education divides states into categories. But in an effort to encourage innovation, federal officials say they are "not bound by these estimates."

Category 1: $350-$700 million: California, Texas, New York, Florida

Category 2: $200-$400 million: Illinois, Pennsylvania, Ohio, Georgia, Michigan, North Carolina, New Jersey

Category 3: $150-$250 million: Virginia, Arizona, Indiana, Washington, Tennessee, Massachusetts, Missouri, Maryland, Wisconsin

Category 4: $60-$175 million: Minnesota, Colorado, Alabama, Louisiana, South Carolina, Puerto Rico, Kentucky, Oklahoma, Oregon, Connecticut, Utah, Mississippi, Iowa, Arkansas, Kansas, Nevada

Category 5: $20-$75 million: New Mexico, Nebraska, Idaho, West Virginia, New Hampshire, Maine, Hawaii, Rhode Island, Montana, Delaware, South Dakota, Alaska, North Dakota, Vermont, Wyoming, District of Columbia

Source: U.S. Department of Education Web site

NASHVILLE - The Bredesen administration is talking about submitting an application for as much as $500 million in federal Race to the Top funding grants - twice the dollar limit initially set by U.S. Department of Education officials.

But that doesn't appear to be a problem for federal officials as they watch governors and legislatures across the nation scramble to compete for a piece of a $4.35 billion pot that rewards states that submit innovative plans to transform K-12 education.

"We want all states to put forth the most progressive education reform plan, put their best plan forward, and we're going to judge those applications on the merits, no matter what the dollar figure," U.S. Department of Education spokesman Justin Hamilton said Tuesday.

Gov. Phil Bredesen has dangled the prospect of "hundreds of millions of dollars" for public education and has announced he will call a special session of the General Assembly to address the Race to the Top funds.

He said the special session, which would begin Jan. 12, is necessary to change education laws that officials believe stand in the way of the state's application for the federal grants. States' applications for the funding are due Jan. 19.

The changes would allow school officials to link teacher and principal evaluations and the initial granting of tenure to student performance. Any improvement would be measured by Tennessee's value-added testing system, which measures the amount of gain students make in a year.

Other potential changes call for annual teacher evaluations.

Tennessee Education Department spokeswoman Rachel Woods said the state is looking at submitting a Race to the Top plan in the $400 million to $500 million range, although she noted that the figures could be somewhat higher or lower.

On its Web site, the U.S. Department of Education divides states into five competitive categories for funding, based roughly on their student populations. Tennessee is in Category 3, a nine-state grouping that includes Virginia and Wisconsin.

According to the Web site, grants would range from $150 million to $250 million for Category 3 states.

Georgia is in Category 2, a seven-state category that pits it against states such as North Carolina and Illinois for between $200 million to $400 million.

"These ranges may be used as rough blueprints to guide states as they think through their budgets, but states may prepare budgets that are above or below the ranges specified," the Education Department Web site says.

Ms. Woods said the federal government "backed away" from strict funding categories in part because they were "too binding in terms of pushing really bold reforms."

"They want applications to really push the bar in terms of what you propose to do and not be limited based on how much funding you would expect to receive," she said.

Speaking in Murfreesboro last week, Gov. Bredesen was vague about how much the state would seek but said, "I promise you that I won't under-ask. Far better to over-ask and get turned back a little bit than to fail to go for it."

The Tennessee Education Association, which represents teachers, has raised concerns about the governor's proposal to heavily rely on student achievement when it comes to evaluating teachers.

TEA's chief lobbyist, Jerry Winters, acknowledged that at "a time when the state's in a horrible financial mess, the possiblity of getting possibly several hundred million dollars has got to be very appealing to state legislators."

But he said the governor is asking the state to move quickly to approve changes for money that may not materialize.

Meanwhile, Mr. Winters said, the "weight" given to test scores in evaluating teachers "is still a major sticking point."

Teachers are "not afraid to be held accountable," Mr. Winters said, but they "are leery of over-emphasizing test scores."