OFFICIAL EXPLANATION
The non-underlined portion of the sentence contains the phrase "ordered that," which requires a clause containing the subjunctive mood. However, the original sentence uses "should be tested" instead of the subjunctive “be tested.” In addition, it is illogical to test a lake or stream "for mercury levels": this implies that one is testing to see whether mercury levels exist. Instead, one would “test the mercury levels” of the lake or stream, measuring the amount of mercury.
(A) This choice is incorrect as it repeats the original sentence.
(B) The active construction “all lakes and streams should have their mercury levels tested” is illogical: lakes and streams cannot do such a thing, rather a person would have to test the mercury levels of the lakes and streams.
(C) This choice correctly uses the subjunctive “be tested.” However, the placement of the prepositional phrase “for all lakes and streams” after “be tested” is awkward and can be misinterpreted to mean that the testing is “for” or “on behalf of” the lakes and streams. Instead, one would test “the mercury levels of all lakes and streams.”
(D) The non-underlined portion of the sentence contains the phrase "ordered that," which requires a clause containing the subjunctive mood. However, this choice uses "should be tested" instead of the subjunctive “be tested.”
(E) CORRECT. This choice correctly uses the subjunctive “be tested,” and correctly references the testing of “mercury levels,” replacing the incorrect “tested for mercury levels.”