Rep. Marty Russo (D-Ill.) was hunting for some spare federal funds to compensate crime victims, and found a tempting bundle hidden deep in the Interior Department.

Each year, Interior receives the proceeds of a 10 percent federal excise tax on handguns--$23 million last year, a projected $30 million this year--and spends it on "wildlife restoration and hunter safety." Russo discovered that half the handgun tax is earmarked for the construction of target shooting ranges and other hunter education programs.

To a former Chicago prosecutor who has championed crime victim legislation for eight years, this seemed misdirected. "Money from the weapons that create victims should be the money used to compensate them. . . ," Russo said yesterday. "Let's use the money where the handgun creates our problems."

So Russo plans to introduce a bill today that would divert the handgun tax from Interior to a federal trust fund to assist victims of violent crime, a fund he proposed in a bill introduced earlier this month. Russo predicted the program would cost $16 million in its first year, well under the amount raised by the handgun tax.

Interior officials declined to comment on Russo's bill, except to say their 45-year-old program has been effective in protecting wildlife populations and training hunters. It raised $117 million last year through excise taxes on bows and arrows, rifles and ammunition as well as on pistols. The money is funneled to the states for wildlife research, for purchase of new wildlife refuges and for hunter safety programs, a spokesman said.

Environmentalists have attacked the fund as a "wildlife manipulation" and "hunters' subsidy" program since it is used mostly for game rather than non-game animals. So Russo's proposal drew cheers from Friends of Animals president Alice Harrington. "This is a back-door method for us to reduce the subsidy of the hunting world to help living people," she said.