Congress has approved legislation to make it easier for the District of Columbia government to sell revenue bonds on behalf of private institutions, such as local universities, that wish to finance construction and other projects.

The legislation is designed to help the city government sell its own bonds eventually. But it is considered unlikely the city will be able to enter the municipal bond market until its budget deficit is eliminated, and Congress has remained steadfast in refusing to allow a $184 million bond sale requested by Mayor Marion Barry for the purpose of financing the deficit.

The legislation approved last week consists of amendments to the city's home rule charter.

According to Philip M. Dearborn -- who earlier this year as Barry's financial adviser helped draft the amendments -- the immediate effect of the measure will be to facilitate the sale of revenue bonds through the city government by private institutions, a practice allowed by the charter.

But Rep. Thomas J. Bliley Jr. (R-Va.), a member of the House District Committee and a frequent critic of the city government, introduced the technical bonding legislation at the behest of local universities. Bliley, an alumnus of Georgetown University, said yesterday that he was asked to sponsor the legislation by a representative of Georgetown.

"It doesn't give the District any new authority," Bliley said of the amendments. But he added that they do allow private institutions that sell revenue bonds through the city to pledge the structure they wish to build from the proceeds of the bond sale -- a university dormitory, for example -- as collateral. Currently, the institutions must pledge actual funds as collateral, and this creates financial strain, Bliley said.

He said Georgetown officials told him they are interested in selling bonds to build student housing and a medical building. Other schools such as George Washington University and American University were also interested in having the legislation, he said.

The amendments were passed by the House last Monday and by the Senate on Tuesday, by large margins in both chambers.

Dearborn said that while the amendments will have little, if any, immediate effect on the city government itself, they nevertheless will aid eventual city bond sales by clarifying charter provisions in ways designed to reassure potential bond purchasers.

For example, he said, the amendments specify that funds to pay bond holders will be exempt from the annual congressional appropriations process. This means, he said, that if Congress does not approve the city's budget until after a new fiscal year actually starts -- a common situation -- funds to pay bond holders will still be available.

"It was always the intention of the Congress to allow the city to sell bonds," Dearborn said. "But everybody knew that as the charter stood, it would be a practical impossibility." He added, though, that city bond sales remain practically impossible in the absence of a solution to the District's budget deficit.