July 22, 1981

The Koch administration proposed legislation yesterday that would require that works of art be included in every newly constructed or substantially reconstructed municipal building open to the public. Under a bill submitted to the City Council, 1 percent of the first $20 million of capital construction costs and one-half of 1 percent of any amount in excess of that would be devoted to the commission or purchase of art works, with an expenditure ceiling for any one building set at $400,000. Mayor Koch said the bill reflected the beliefs of such advocates of the move as Doris Freedman, president of the Municipal Art Society, and the late City Councilman Antonio G. Olivieri that ''art can enhance the urban environment, that artists must be active participants in the creation of our city and should be paid for their contributions.''

Senator Daniel Patrick Moynihan charged today that the White House and the Justice Department had ignored the Senate Intelligence Committee's repeated requests for confidential files relating to the business dealings of the Director of Central Intelligence, William J. Casey. ''For the past two days we have been urgently trying to find out whether the Director of the C.I.A. has been involved in illegal activities that would make him unfit to hold his office,'' the New York Democrat shouted, waving his arms for emphasis at a hearing by the Intelligence Committee. The panel is examining whether Mr. Casey was involved in questionable stock market practices in the late 1960's. Today it sent a letter to the White House and the Justice Department asking for all material and relevant documents from an F.B.I. background check of Mr. Casey. The letter was signed by Mr. Moynihan, the committee's ranking minority member, and the committee chairman, Senator Barry Goldwater, Republican of Arizona.

''I'm as much an Englishman as Prince Charles is. India's not my home.

The stately, orderly preparations for the royal wedding a week from tomorrow were disrupted tonight when the Spanish Government announced that King Juan Carlos and Queen Sofia had declined their invitation to the ceremony as an act of protest. Their decision resulted from the plan of Prince Charles and Lady Diana Spencer to board the royal yacht Britannia at Gibraltar for a two-week honeymoon cruise in the Mediterranean after spending their first two nights as husband and wife at Broadlands, the country estate of the late Earl Mountbatten of Burma at Romsey in Hampshire. Gibraltar, a two-square-mile enclave near the southern tip of the Iberian Peninsula, has been a British naval base and crown colony since the early 18th century and has long been a subject of dispute between the two nations. It is one of Spain's most emotional political issues, with leaders of most political parties demanding that the British withdraw.

The Chrysler Building. The Texas School Book Depository in Dallas. The old Boston Naval Shipyard. Philadelphia's Bellevue Stratford Hotel. All have been rehabilitated with the help of Federal tax incentives that would be greatly expanded under tax bills now moving through Congress. Proponents of the more generous incentives hope they will combat the flight of industry to the Sun Belt, and induce business to remain in the urban centers of the Northeast and the Middle West.