This paper presents the results of the second annual survey of state school-finance legislation conducted by the Education Finance and Economics Program of the National Education Association's Research Unit. The report, the only comprehensive 50-state survey being conducted, has three major purposes: (1) to provide an annual snapshot of state legislative activity in school finance; (2) to serve as a reference guide for legislative language with regard to particular education-funding areas; and (3) to contribute to the development of a long-term database of school-finance legislation that will allow for trend studies and policy analysis. The study shows that the 1997 legislative session witnessed a watershed in the number and variety of bills passed, with most of the activity coming in special-purpose education programs, tax bases and taxation, and capital outlay. It was a strong fiscal year for most states, with appropriations of education surpassing growth in other state-spending categories. Increased funding was especially evident in elementary and secondary education in general, and in charter school programs in particular. New initiatives were also commonplace, with novel approaches being used to improve student achievement, early childhood education, and alternative education programs. Three tables provide summaries of state financing and legislation. (RJM)