Tucked away in the Senate tax bill is an amendment offered by William Armstrong (R-Colo.) that would grant an exclusive multimillion-dollar break for eight investors, including a wealthy Oklahoma media executive who is a former business associate of Armstrong.

The Armstrong amendment -- one of 175 special transition rules that were inserted into the tax measure last month with no public hearings or debate -- would preserve preferential capital-gains tax treatment for one firm, Cimarron Coal Co.

The Colorado firm's owners include eight individual investors, the largest of whom is Edward L. Gaylord, a prominent Oklahoma City media magnate whose holdings include The Daily Oklahoman newspaper, the Grand Ole Opry in Nashville, 10 radio and television stations and a 30 percent interest in the Texas Rangers Major League baseball team.

During a heated debate on the Senate floor this week, Howard Metzenbaum (D-Ohio) attacked the provision as a "far-out amendment" that granted a "special privilege" to unidentified investors. Without disclosing the investors, Armstrong countered that his provision granted tax equity to the investors and was therefore justified whether the beneficiaries were "one, two or 1,000 taxpayers."

The Senate then voted to uphold the amendment, 68 to 31.

According to Armstrong's financial disclosure form, the Colorado senator received more than $100,000 in capital gains and interest income last year from Gaylord's family-owned company, Oklahoma Publishing Co. Armstrong sold the now-defunct Colorado Springs Sun newspaper to the Gaylord firm in 1977. Dick Wadhams, the senator's press secretary, said the income represented the final payments from Gaylord to the senator on the sale in August of 1985.

Wadhams said Armstrong no longer has any financial relationship with Gaylord. While the senator is a friend of Gaylord through the newspaper sale and was "aware" of Gaylord's interest in Cimarron Coal Co., Armstrong did not sponsor the tax break at his request or for his benefit, Wadhams said.

"This was based on the equity of the case for Cimarron Coal that was brought to him," said Wadhams. "It had nothing to do with who was involved and that's all there is to it."

Armstrong's financial ties to Gaylord were first reported in Colorado newspapers. Gaylord was travelling yesterday and was unavailable for comment.

As part of an effort to eliminate loopholes, the Senate bill ends the special treatment of capital gains, currently taxed at a maximum of 20 percent, and establishes a new and lower maximum tax rate for all income of 27 percent.

The Armstrong amendment, which was cosponsored by David Boren (D-Okla.), would allow investors in Cimarron Coal to continue to receive the special 20 percent tax rate indefinitely on royalty income they receive from a strip mine in northeast New Mexico.

The Joint Committee on Taxation has estimated the Treasury would lose $2 million during the next five years from the tax break, but William Diss, Cimarron's accountant, estimated yesterday that it could be more than twice that depending on the amount of coal mined.

Diss said the break was justified because Cimarron's owners were locked into a fixed-price contract for the coal that was renegotiated in mid-1981 in anticipation of the tax bill that year that established the 20 percent lower tax rate.