Developers seeking financing for  projects in historic, cultural or  entertainment districts in the  state will have a bigger pot of money  to draw from come July 1.

On that date, the Iowa Department  of Cultural Affairs will begin accepting  new applications for historical,  cultural or entertainment district tax  credits, said Gordon Hendrickson,  administrator of the department’s  Public Trust Division. The division  includes the State Historic Preservation  Office, which administers the tax  credit program.

The program ran out of money for  new credits two years ago, and as of  last year a backlog of about 75 projects  were awaiting funding. A coalition  of economic development  groups, among them the Greater Des  Moines Partnership, lobbied for an  increase in the cap,which the Legislature  approved in April.

Gov. Chet Culver is expected to  sign the bill, which increases the cap  on the credits from $6.4 million per  year to $10 million beginning July 1.  The cap increases to $15 million  beginning in July 2008 and then levels  off at $20 million in July 2009.  For the first time, tax credit holders  will also be able to choose to  receive a refund for unused credits  rather than carrying them forward to  the following year.

Between now and July 1, the division  will work to “identify, clarify and  publicize our internal procedures so  that everyone knows what’s  required” to apply for credits, Hendrickson  said.Among the details to be  sorted out is the actual date the cap  will rise, because July 1 falls on a Sunday  this year, he noted.

Through the program, developers  are issued 25 percent tax credits,  which they typically sell to institutional  investors to provide working  capital for their projects.

The legislation also shortened the  time horizon over which the credits  can be extended from five years to  three and adjusted the dates of credits  that extended further than that.

Because of that, the total amount  available for new projects that can be  reserved this year will actually be  about $18 million, even though the  cap has increased, Hendrickson said.  “I feel good about that number  because that equals about a third of  what we’ve been able to do thus far in  the program,” he said.

Allowing tax credit holders to  receive a refund on the credits will  enable the state to realize the full  development potential of the credits,  Hendrickson said.

“If we’re putting $250,000 into a  project, we want the developer to be  able to use that full value to return that  building to the tax rolls,” he said.