CARSON CITY, Nev. — Nevada was eliminated Tuesday from consideration for "Race to the Top" education grants, losing out on competing for up to $160 million in federal funding under a program designed to spur innovation in public schools.

Eighteen states and the District of Columbia were named finalists in the second round of the school reform grant competition, giving them a chance to win a share of $3 billion.

State legislators, during a special session in February, amended a statute removing 15 words that had banned student test scores from being used in teacher evaluations. That provision had made Nevada the only state ineligible to even apply.

Lawmakers, at the urging of the teachers union, inserted 31 new words clarifying that test scores can't be used as the "sole criteria" in teacher evaluations or disciplinary actions.

Critics feared the new language could jeopardize the state's chances of receiving the grant money, and Gov. Jim Gibbons threatened to veto, but eventually signed, the legislation.

Gibbons also formed a 29-member task force, co-chaired by Las Vegas casino executive Elaine Wynn and Nevada higher education Chancellor Dan Klaich, to coordinate the state's application. A consultant was also hired, for $40,000, to complete Nevada's application that was submitted in late May.

Finalists for the second round of grants are: Arizona, California, Colorado, Florida, Georgia, Hawaii, Illinois, Kentucky, Louisiana, Maryland, Massachusetts, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, and South Carolina.

Two states, Tennessee and Delaware, were awarded a total of $600 million in the first round of the competition.