The quality of the academic standards in America's public schools is one of the pressing issues on the minds of parents and the public. This document, the third annual report by the American Federation of Teachers (AFT), reports on how many states are committed to setting common academic standards and analyzes the quality of the standards against AFT criteria. It also reports on states' intentions to assess whether students are meeting the standards, to provide extra academic help to students who are not meeting the standards, and to attach meaningful consequences to the standards. Findings are based on interviews with officials and analysis of documents from the 50 states and the District of Columbia. Section 1 describes the AFT criteria for judging state reforms. Section 2 presents national figures regarding the quality of state standards, the work under way on assessments, and the plans for student incentives linked to the standards. Charts with state-by-state data on major issues described in section 1 are included. Section 3 offers recommendations to states for ensuring successful reforms. The fourth section elaborates on findings for each state, discusses the strengths and weaknesses of each state's standards, and describes their plans for assessment, student incentives, and academic intervention. The final section contains official state responses to the report. Some major findings include the following: (1) Every state except Iowa is setting common academic standards for its students, and most consider standards a work in progress; (2) over the course of the year the quality of state standards has improved; and (3) most states, however, still need to improve some of their standards. (LMI)