Lawmakers are putting the finishing touches on a bill financing the U.S. Department of Education for the rest of the fiscal year (which goes until Sept. 30, 2012). And it looks like the Obama administration’s signature education reform initative—Race to the Top—is going to get another year of funding.

Even though Race to the Top is one of the president’s favorite programs, it’s renewal wasn’t a slam-dunk. President Obama asked for $900 million to continue the program for another year. The administration also wanted to open it up to districts.

It looks like at least part of its wish is coming true. Race to the Top would be funded in the bill, soon to be introduced. For the first time it would include a district-level competition, sources say.

But we’ll have to wait until the bill comes out to find out just how much money is up for grabs this time. The Race to the Top competition initially got $4 billion for individual state grants under the American Recovery and Reinvestment Act. But it only got about $700 million in fiscal year 2011.

Lawmakers in the House and Senate have both written spending bills for the U.S. Department of Education next year. And they have very different visions when it comes to K-12 funding.

A bill approved by the U.S. Senate Appropriations Committee included nearly $700 million for Race to the Top, the same as in fiscal year 2011. But a bill introduced in the House zeroed out Race to the Top, along with other major Obama administration initiatives such as Promise Neighborhoods, the Investing in Innovation Grant program, and the School Improvement Grants. In all, the House bill seeks to eliminate 31 Education Department programs.

Those cuts freed up money for huge increases to Title I grants for districts and special education funding—the core federal programs that go out to just about every school district in the nation.

Meanwhile, the Senate measure provided level funding for both Title I and special education, but only cut a handful of very small, targeted programs, such as the $25 million Voluntary Public School Choice, and the $26 million Foreign Language Assistance Program.

Lawmakers in both chambers will have to figure out a way to reconcile these two very different measures. A bill to do that could released as soon as tonight.