By Steve Zurier. The $350 billion tax cut President Bush signed this spring may be great for builders because it lowers tax rates, encourages investment, and promises to deliver funds for much needed transportation and school construction projects.

The Associated General Contractors of America (AGC) identified these highlights:

Small-business expensing. Companies that buy less than $400,000 of equipment in 2003 can expense the first $100,000.

Depreciation. Companies that buy less than $400,000 of equipment and expense the first $100,000 can deduct up to 50 percent of the remainder.

State and local spending. State and local governments will receive $10 billion they can use to build new highways and schools; states to receive another $10 billion for Medicaid.

Dividends and capital gains. Shareholders owning stock in C corporations now taxed at 38.6 percent will be taxed at 15 percent. The 15 percent rate applies to personal stock and shares in a building company. The tax on shareholders for capital gains drops to 15 percent.

Individual tax relief. The top rate is reduced from 38.6 percent to 35 percent; and the 35 percent, 30 percent, and 27 percent brackets are cut 2 points retroactive to Jan. 1, 2003.

The AGC and NAHB say tax cuts will stimulate the economy while the National Low Income Housing Coalition says the cuts may create deficits that could reduce funding for housing projects for the poor.