This paper first addressed the fundamental issues in college English teaching including appropriate objectives of students’ college English ability development and position of college English as a course in current domestic higher education system, as well as definitions of English ability and target language of English learning for English learners in China. Then it expounded on the key linguistic competence constructs, namely, separability of language ability, instrumentality and humanities attribute of language ability, intercultural communication competence and critical thinking ability, which underpin the design of an institutional college English proficiency test. Without an unequivocal understanding of these fundamental issues or key linguistic competence constructs, hardly can test developers and test writers ensure the quality and validity of any institutional college English proficiency test.