State and school district testing activities involving basic reading competency requirements are discussed. The purposes of minimum competency testing in reading include the identification of students who need remedial assistance, and the evaluation of secondary school students regarding graduation requirements. Important considerations regarding test content include: its relationship to the assessment purposes, the role of task analysis, the priorities of particular skills, the type of test, the ways to include teacher judgment, the practical vs. academic flavor of the test, the methods for presenting very difficult materials, and the need for a more developed theory of reading. Several general properties of good systems for setting standards are presented: (1) The school's responsibility toward the needs of the students and of the society must be recognized. (2) Management standards regarding planning, delegation of responsibility, and review or quality control should be maintained. (3) Expectations must be realistic. (4) Standards should be administered with adequate student preparation and feedback. (5) Standards should be applied consistently and should be acceptable to other institutions, so that credits will be transferred. (6) Standards should be administered fairly so that the involved students feel they have been well served. (Author/MV)