WASHINGTON -- At least one kind of municipal debt -- 501(c)(3) bonds -- is sure to benefit if, as expected, Sen. Daniel P. Moynihan becomes chairman of the Senate Finance Committee in the 103d Congress, Capitol Hill observers said yesterday.

But it is not clear if the New York Democrat's support for bonds used for private, nonprofit organizations means he will support the easing of curbs on other kinds of tax-exempt bonds.

The spotlight is now on Moynihan because he is second in seniority on the panel to committee Chairman Lloyd Bentsen, D-Tex., who is expected to be named this week as President-elect Bill Clinton's nominee for Treasury secretary.

Moynihan has fought vigorously for years to protect the tax-exempt status of bonds issued for private, nonprofit organizations, especially universities, congressional aides and lobbyists say. He can be expected to continue that crusade as chairman of the committee, they add.

"Obviously, if you're an educational institution with 501(c)(3) status, I think you're probably going to be celebrating fairly soon," said a municipal lobbyist who asked not to be identified.

Capitol Hill observes credit Moynihan with successfully fighting, during consideration of the Tax Reform Act of 1986, to keep 501(c)(3) bonds out from under the private-activity bond volume cap.

In passing the 1986 tax act, Congress did impose a cap of $150 million on the amount of bonds that individual universities and other nonhospital 501(c)(3) entities may have outstanding. Moynihan introduced legislation in 1989 and again in 1991 that would eliminate that cap and reclassify 501(c)(3) bonds as public-purpose debt. The proposal was included in tax legislation passed by Congress this fall that was vetoed by President Bush.

The lobbyist who requested anonymity cautioned, however, that Moynihan's support for 501(c)(3) bonds did not necessarily translate into support for the entire public finance agenda.

"His interest in bonds has been in a very narrowly circumscribed area, so that makes it difficult to generalize what he thinks of the world, from general municipal finance to mortgage revenue bonds and industrial development bonds," the lobbyist said. "There's not a lot of evidence on where he would go."

But John T. McEvoy, the executive director of the National Council of State Housing Agencies, said his impression of Moynihan is that he has been a friend to the bond community in general.

"Moynihan has always been a supporter of public finance," McEvoy said. "He supported the bill which went to the President this fall which continued [the low-income housing tax credit and the tax exemption for mortgage revenue bonds] on a permanent basis."

Moynihan, 65, was first elected to the Senate in 1976 and is in his third term. He has served in the federal government in one form or another for about 30 years, starting as an assistant secretary of labor under President Kennedy. He has also been active in foreign affairs, serving as ambassador to India under President Nixon and ambassador to the United Nations under President Ford.

But Moynihan also has a reputation for being an eccentric and an outsider, a role that lobbyists said has served him well as a member of the finance panel, but may not bode well for his chairmanship.

"He has a reputation for being difficult to get along with," a tax lobbyist said. While Bentsen is a calm consensus builder, Moynihan "tends to be ore temperamental and unpredictable."

Some Capitol Hill watchers agree with that assessment, but two others who have worked with Moynihan said they were optimistic about his ability to be a strong chairman of the committee.

"I would be the last one to say he isn't tough," said McEvoy, who worked for the Senate Budget Committee from 1974 to 1981, while Moynihan was a member of the panel. During that time Moynihan "had an agenda and he pursued it vigorously."

If Moynihan becomes chairman of the finance panel, "I have no doubt of his ability to carry out that job," McEvoy added.

Similarly, the municipal lobbyist who requested anonymity was a Senate aide during the mid-1980s when Congress was considering major amendments to the Social Security Act, an issue that Moynihan has championed.

"He was a very effective legislator when he was doing that," the lobbyist said. "If he brings the same kind of patient tenacity [to the chairmanship of the finance panel], then I think he could be a very effective and productive chairman."

A Senate aide also said he had no qualms about Moynihan's ability to lead the committee. "He's a sharp guy. He'll do just great," the aide said.

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