Most states have developed or revised school accountability systems in response to the Every Student Succeeds Act (ESSA). While these systems include multiple indicators, to many stakeholders the outcome of central interest is the overall rating or classification produced for each school. These ratings are often used to identify schools that merit reward or require support and to evaluate the efficacy of educational programs and policies. States vary in their approach to producing school ratings. Whether an overall or composite rating is provided, many states communicate performance using report cards or "dashboards" that often describe indicator level performance in terms thresholds (e.g., high/low; met expectations/ did not meet expectations; etc.). Given the central importance of the accountability rating at the indicator or overall level, it is only reasonable to require compelling evidence that the rating has a high degree of validity for its intended interpretation and uses. While there is a substantial research base in support of standard setting for assessments, very little attention has been given to establishing performance expectations in the context of school accountability systems. This paper outlines recommended principles to guide the establishment of a standard setting-process for accountability systems and describes a framework for implementing standard setting. The framework is a systematic process to establish accountability performance standards that includes the following steps: (1) Policy Definitions (PD); (2) School performance level descriptors (SPLDs); (3) Standard Setting Panel; (4) Standard Setting Preparation; and (5) Standard Setting Event. In light of the importance of overall accountability school classifications, the process for establishing performance thresholds should be based on a well-defined, defensible procedure that reflects the state's vision for the system. This document may be helpful to education leaders seeking to develop a process for establishing accountability performance classifications that fit their system characteristics and policy priorities. [This is the second of a three-paper set of resources presented at CCSSO's "State Plan Implementation for ESSA" in April 2018. For "Where the Rubber Meets the Road: Operations and Quality Control in School Accountability Systems," see ED586784. For "Accountability Identification is only the Beginning: Monitoring and Evaluating Accountability Results and Implementation," see ED593496.]