Report cards for elementary school children are moving towards reflecting the students' mastery of grade-based skills. Picture it sort of like getting a performance review at work. There are certain skills that the kids are supposed to demonstrate they can do at the end of a year, just like at work you might set goals for the year. Then at a quarterly, or mid-year review, you would document your progress against meeting your goals, right? Similar to what they're doing with report cards...it's about measuring progress against goals of mastering a set of skills.
It's a subtle difference in the case of your school district, but the new set, to me, gives a better sense of progress along a continuum while the older set can be interpreted as more of a label - my child is advanced, my child is proficient, my child is basic. Compare that to the new set...the new set clearly indicates that they are measuring "work" and not some innate part of the child's identity...my child's skill at addition and subtraction facts is advanced, his sight reading is basic, his writing is proficient, etc.
Our school district is so sick and tired of every parent wanting his or her child labelled as advanced that there is no grade for that LOL. Our grades through grade 5 are M (meets the standard), W (working on the stardard), or L (limited understanding of the standard).