The issue of using language proficiency or language dominance to assess programs for high school students with limited English speaking backgrounds is addressed. The development and initial analyses of the Competency Based Oral Language Assessment (COLA) are discussed. Three components of oral language are rated separately: semantics; syntax and morphology; and phonology. The use of COLA is based on guidelines suggested by the Department of Health, Education, and Welfare: (1) to determine the language proficiency of students whose primary language is not English; (2) to prescribe programs which meet students' needs; and (3) to assess students' language dominance to determine the most beneficial language of instruction. Instrumentation; content validity; predictive validity; scoring; interrater reliability; evidence and correction for rater bias, and procedures for interpreting results of COLA are explained, and four case studies are presented as illustrations. It is emphasized that COLA does not assess students' overall intellectual ability or aptitude, and that a clear distinction should be maintained between language proficiency and language dominance. It is suggested that proficiency scores be used for placement into special language programs, while dominance scores be used to plan individualized program activities or strategies. (MH)