This report provides Minnesota legislators with background information on establishing state educational standards and periodic testing to measure student progress. Scientific management, the accountability movement, and the basic education movement were educational trends of the 1970's providing pressure on states to set standards to improve education. From 1975 through 1982, 39 states enacted some form of minimum competency testing programs. Supported by parents, employers, legislators and boards of education, but often opposed by traditional educational leaders, these programs have been hotly debated. Many states have scaled down or delayed their programs. There are currently a wide variety of minimum competency testing programs in 36 states. Thirteen have testing as a graduation requirement. Consensus is developing about characteristics of effective competency testing. Legal problems with testing programs revolve around three issues: adequate notice, test content, and impact on special groups. While Minnesota does not set and test state standards for its students, it has three programs to assist local schools in this area: (1) the Planning Evaluation and Reporting Law; (2) curriculum planning documents; and (3) a statewide educational assessment program that uses standardized tests in selected subject areas. Many Minnesota school districts have also initiated their own programs. The appendix is a chart, "Characteristics of Existing State Competency Testing Programs." (BS)