This document looks at educational reform related to teacher incentives policy through legislative and state education agency perspectives. It includes an overview of national issues pertaining to teacher incentives, a narrative report on the status of teacher incentive policies in the seven state region serviced by the North Central Regional Educational Laboratory (NCREL), and a summary of the discussion of a panel of state legislators and state education agency representatives in the NCREL region. Perspectives on impetus, implementation, evaluation, and future directions are included in the panel discussion. (Author)