The Austin (Texas) Independent School District (AISD) required that all students who graduated in 1985-86 and previous years have skills in reading and mathematics equivalent to ninth-grade level or above. Special education students who could not be validly tested were exempted from the requirements. Students who had not met the requirements could graduate if their parents signed a letter of waiver. This report describes the impact of these requirements on students. The major positive findings were: (1) of the 3,195 high school graduates in 1985-86, the percentage who met the district's minimum competency requirement was 91 percent in reading, 93 percent in mathematics, and 90 percent in both reading and mathematics; (2) students in grade 11 performed well on the first administrations of the Exit-level Texas Educational Assessment of Minimum Skills (TEAMS), with 92 percent meeting state requirements in language arts and 90 percent in mathematics; and (3) AISD's minimum competency requirements apparently have had a positive effect on student achievement. Compared to 1977-78, a higher percentage of seniors has demonstrated competency at or above the 8.5 grade equivalent every year. Also, compared to 1981-82, a higher percentage of seniors has demonstrated competency at or above the 9.0 grade equivalent every year. Starting in 1986-87, AISD minimum competency requirements will be replaced by the Exit-level TEAMS. Students may be denied a diploma as a result of not passing Exit-level TEAMS. (Author/MDE)