PORTLAND – A new law that makes up to $5 million available to developers willing to rehabilitate historic buildings in Maine drew a record crowd Tuesday, a bellwether of its potential to spur new life in old buildings, organizers said.

“This is a great indication of the interest level in Maine historic preservation tax credits,” said consultant Amy Cole Ives, a panelist at the Maine Real Estate and Development Association breakfast meeting and former tax and preservation specialist with the Maine Historic Preservation Commission. “That, and the fact that it was passed by the Legislature.”

More than 80 real estate professionals, developers, investors, bankers and others – a record breakfast turnout for the statewide trade association – attended the meeting at the Clarion Hotel to gauge the usefulness of the new law.

The measure provides a state tax credit equal to 25 percent of qualified costs for an approved historic rehabilitation project; 30 percent if the project includes a significant affordable housing component.

Coupled with the available 20 percent federal tax credit, a developer could see more than 45 percent of qualified costs refunded through historic preservation tax credits.

“This is a significant contribution to restoring our historic downtowns,” said John Kaminski, a tax lawyer with Drummond and Woodsum, who has worked on the law and was one of the association panelists.

Details of the law will be worked out this summer and is planned for public comment in August. But its overall intent is to preserve the buildings that give Maine character, a priority outlined in the 2006 Brookings Institution report. Cole Ives said a building such as Lewiston’s Bates Mill No. 5 is a perfect candidate.

“It’s one of the best bets for that building,” she said, noting that the Albert Kahn-designed mill is an architectural gem. “There’s a fantastic collection of buildings in L-A that have a lot going for them and could benefit from this program.”

The Maine Historic Rehabilitation Tax Credit is funded with a portion of real estate transfer taxes. All projects must meet several standards to be eligible for the state tax credits.

First, the cost to rehabilitate the building has to exceed its original cost adjusted for depreciation, improvements and other tax factors. Also, the building must be certified as historically significant.

A rehabilitation project falling between $50,000 and $250,000 that is not claiming the federal tax credit can apply for 25 percent of eligible costs. Bigger projects that claim federal tax credits can claim 25 percent from the state program as well, up to $5 million.

To get the 30 percent credit for affordable housing, a project must have more than 33 percent of its footprint earmarked for that market. Or, if it’s a mixed-use project, 50 percent of the project must be set aside for residences and of that, half must be earmarked for affordable housing. Affordable is defined as housing for people at 60 percent of the median income level set by the federal government.

The tax credits have a five-year life span after the project is finished. There are serious penalties if a developer strays from the requirements. The credits are only available for expenses incurred between Jan. 1 of this year and Dec. 31, 2013.

The law also was designed to encourage investment from out-of-state developers. The tax credit is fully refundable, meaning an out-of-state developer who undertakes an approved project can get the tax credit, as long as he pays taxes in Maine. If his tax liability is lower than the approved credits, the difference is awarded as a refund. Conditions also allow the tax credit or refunds to be exempt from federal taxes.

Cole Ives predicts the program will get a lot of use once the details have been ironed out through the rule-making process this summer. If all goes according to plan, the program will be up and running in September.

She applauded state Sen. Peggy Rotundo of Lewiston for her support of the law through the Appropriations Committee.

“She was really instrumental in making this happen,” Cole Ives said. “She understands the potential for this, especially in her community.”