A novel idea surfaced yesterday in the House of Representatives: a proposal to create a Pinocchio award for the legislator who sticks his nose deepest into another's business.

The proposal, made only half-facetiously by Rep. Don Young (R-Alaska), came as the House spent another day debating a $10.6 billion energy-water appropriation bill.

Young and others were perturbed by a proposal by Rep. John J. Cavanaugh (D-Neb.) to kill a $6 million appropriation for a Bureau of Reclamation dam project on the Niobrara River in Nebraska.

Led by Rep. Virginia Smith (R-Neb.), in whose district the dam would be built, opponents of Cavanaugh's amendment challenged his "right" to move against a colleague's favored project.

The mood of the House was clear, just as it had been the day before when Rep. Robert W. Edgar (D-Pa.) was roundly criticized for attacking a West Virginia dam project.

Cavanaugh's amendment was defeated, 210 to 106, on a roll call.

A similar fate awaited Rep. George E. Brown Jr. (D-Calif.), who proposed cutting $6 million for Bureau of Reclamation desalinization plant on the Colorado River at Yuma, Ariz. He argued that the $339 million plant could cost $1 billion and still not do its intended job. Brown lost, 253 to 34.