Legislation dealing with competency testing in general falls into the following categories: (1) mandating uniform statewide minimum competency testing, to which high school diplomas and/or grade promotion is related; (2) mandating uniform statewide minimum competency testing to be used for improvement of instruction but not tied to grade promotion or high school diploma; (3) mandating that local districts develop their own testing programs and establish minimum standards for promotion and/or diplomas; (4) permitting local districts to establish minimum competency standards and establishing some restrictions on such standards; or (5) mandating that local districts provide annual assessment, with no requirement for minimum competency testing. In 1976, statutes were enacted in category five in Minnesota (the Planning, Evaluating and Reporting--PER--Legislation). This paper provides a description of this legislation, the results of the first two years' experience with its implementation, and a discussion of its strengths and weaknesses as opposed to minimum competency testing. Data from 1978-79 and 1979-80 reports to the Department of Education and from a 1980 survey of administrators, Board members, and citizens describe the kinds of planning, evaluating, and reporting taking place, and judgments of professionals and laymen about the process. Results show that PER has served Minnesota schools well, and provided a vechicle for constructive community participation in goal-setting and prioritizing. (Author/GK)