This guide is designed to assist Texas Job Training Partnership Act program staff and Private Industry Council (PIC) members in developing quality local youth competency systems that reach beyond the state-established minimum criteria. Section I discusses background, purposes, and limitations of the document and cites additional sources of information. Section II reviews state policy regarding youth employment competencies. Section III offers basic definitions of competency terminology and gives an example of a competency statement. Section IV offers several factors a PIC and program staff need to consider in deciding whether to establish a competency system, the implications of doing so, and ways to manage the competency-based program in the overall service delivery area (SDA) employment and training effort. Section V is a step-by-step "how to" guide for SDAs to establish a competency system. It includes an explanation, example, and instructional notes on each of the nine categories designated by the state. It also covers PIC/employer involvement and support in developing competency-based programming, obtaining staff support, and marketing the program. Section VI describes and provides ordering information for several prepackaged competency models that potentially meet state requirements. (YLB)