The justification of minimal competency programs relative to perceived educational problems, the focus on individual pupil certification and sanctioning, and the lack of clear resolution on many technical problems, give rise to a number of policy issues critical to minimal competency testing programs which are tied to graduation. Three program models are described and compared across seven of these policy issues: strong state control; large impact on curriculum; increased remediation; difficulty in setting standards; measurement problems; legal challenges; and high costs. The models vary according to state vs. local school district responsibility for selecting competencies, tests, and standards. All policy issues are so complex that it is not possible to recommend a particular model, or to decide whether a testing program should even be implemented. However, several recommendations can be made regarding the adoption of minimal competency testing. The general public should be made aware of its impact on the individual student. If a program is implemented, an adequate phase-in time should be allowed for curriculum revision and test validation. Pilot programs should be implemented and compared--no program need be viewed as the final one. (CP)