A chunk of urban Honolulu - from Downtown to Palama and up to Nu'uanu - could be named a National Heritage Area as early as August.

The heritage area designation would make organizations and businesses in the Capital Cultural District eligible for millions of dollars in federal and other funds to encourage cultural tourism, improve experiences for visitors and residents and beef up educational opportunities designed to teach people about the area's history.

The federal designation does not bring with it any change in existing zoning rules.

U.S. Sen. Daniel K. Inouye, D-Hawai'i, has introduced legislation that would establish the national heritage area and told capital district supporters he believes it could be passed in time for the 50th anniversary of Hawai'i's statehood on Aug. 21.

The heritage area designation for Hawai'i would be the 41st of its kind in the nation.

Mona Abadir, president of the Hawai'i Capital Cultural Coalition board, said the heritage area designation is meant to signify the importance of the history and culture in the urban core.

"This is looking at Hawai'i and saying we're a beautiful natural location, but we're more than that," Abadir said. "We have a rich heritage. It's a unique place."

Work to establish the heritage area has been years in the making. In 2003, the Hawai'i Capital Cultural District was formally recognized by the state and city, and a nonprofit to oversee planning in the area was formed with state and private money.

As part of the approval process, a 240-page study was conducted to explain the history of the district, from the days of the Hawaiian monarchy to modern times.

Cultural district officials say the heritage area designation would trigger a stream of federal and private funds for historic preservation, cultural awareness and educational projects in the district. The cap on National Park Service funds for heritage is now set at $10 million over 10 years, which must be matched by private donors or state funds.

A 2004 Government Accountability Office study found the then-27 heritage areas across the nation received about $45 million in federal funds. Other grants brought the total funding to $84 million, and millions more came in from tourism, the study said.

Inouye, in a news release, called the designation "prestigious" and said federal funding for the area will support "meaningful preservation and promotional activities."

Abadir said the money could go to everything from maps for the area to signage to new programs designed to highlight the history of the area. The heritage area boundaries include Kaka'ako, Iwilei, Nu'uanu, the Pali Lookout, Downtown and Punchbowl.

Gov. Linda Lingle has praised the heritage area designation efforts, and in a recent letter to Abadir called the recognition integral to raising historical and cultural awareness about the area. "It is clear that federal 'heritage area' status for Honolulu's historic core would preserve and enhance this area for residents and visitors," Lingle's letter stated.

The heritage area program started in 1984. Most of the country's national heritage areas are located on the East Coast or in the Midwest and cover oftentimes large parcels of land tied to a significant moment, era or industry in America's history. Last year, three new heritage areas were approved, including the Abraham Lincoln National Heritage Area in Illinois and the Journey Through Hallowed Ground heritage area that crisscrosses four states and is home to Civil War battlefields and other historic sites.