California law requires that the reading performance of children in selected grades throughout the state be tested. Since wide variations exist among California school districts in geographical, social, financial, and many other conditions, information related to many of these conditions in which pupils are learning to read is reported, thus placing the test scores for reading and academic aptitude (IQ) in a meaningful context. In Part I, test scores and other factors are ranked for each school district in the state without regard to type of district organization, size, or academic aptitude of pupils. In Part II, school districts are divided into 76 groups according to type of district organization, size, and median IQ score. Indices of family poverty, percentage of minority enrollments, total general fund tax rates, indices of minimum and maximum salaries paid to teachers, pupil-teacher ratios, and other information are given for each district. This annual report is seen as a factor contributing to the strengthening of California's public school system. (CK)