(1) There is established the School Improvement Fund, separate and distinct from the General Fund. Interest earned by the School Improvement Fund shall be credited to the fund.
(2) The moneys in the fund are continuously appropriated to the Department of Education for purposes of the grant program created by ORS 327.297.
(3) Each fiscal year, the department shall distribute:
(a) 95.25 percent of the moneys in the fund as grants to school districts, the Youth Corrections Education Program and the Juvenile Detention Education Program; and
(b) 4.75 percent of the moneys in the fund as grants to education service districts.