To amend sections 14006 and 14007 of the American Recovery and Reinvestment Act of 2009 to reserve funds under the programs established under such sections for payments to the Bureau of Indian Education of the Department of the Interior for Indian children.

Amends the American Recovery and Reinvestment Act of 2009 to direct the Secretary of Education to reserve 1% to 5% of the amount reserved from the State Fiscal Stabilization Fund for the State Incentive Grant program for a FY2010 grant to the Bureau of Indian Education of the Department of the Interior to carry out activities for Indian children that are consistent with that program. (That program makes incentive grants to states that make significant progress in addressing inequities in teacher distribution, establishing longitudinal education data systems, improving educational standards and assessments, and ensuring the improvement of failing schools.)

Requires the Secretary to reserve 1% to 5% of the amount reserved from the State Fiscal Stabilization Fund for the creation of an Innovation Fund for an award to the Bureau of Indian Education to carry out activities for Indian children that are consistent with the objectives of the Innovation Fund. (The Innovation Fund rewards certain educational entities that make significant progress in closing student achievement gaps.)