text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Competitiveness Tax Credit Act''.
  
  SEC. 2. TEMPORARY INVESTMENT CREDIT FOR NEW MANUFACTURING AND OTHER 
                PRODUCTIVE EQUIPMENT.
  
      (a) Allowance of Credit.--Section 46 of the Internal Revenue Code 
  of 1986 (relating to amount of investment credit) is amended by 
  striking ``and'' at the end of paragraph (2), by striking the period at 
  the end of paragraph (3) and inserting ``, and'', and by adding at the 
  end the following new paragraph:
              ``(4) the manufacturing and other productive equipment 
          credit.''
      (b) Amount of Credit.--Section 48 of such Code is amended by adding 
  at the end the following new subsection:
      ``(c) Manufacturing and Other Productive Equipment Credit.--
              ``(1) In general.--For purposes of section 46, the 
          manufacturing and other productive equipment credit for any 
          taxable year is an amount equal to the sum of--
                      ``(A) the domestic equipment credit, and
                      ``(B) the nondomestic equipment credit.
              ``(2) Amount of domestic and nondomestic equipment 
          credits.--For purposes of this subsection--
                      ``(A) Domestic equipment credit.--
                              ``(i) In general.--The domestic equipment 
                          credit for any taxable year is 10 percent of 
                          the amount equal to the product of--
                                      ``(I) the domestic equipment ratio, 
                                  and
                                      ``(II) the qualified increase 
                                  amount.
                              ``(ii) Domestic equipment ratio.--The 
                          domestic equipment ratio for any taxable year 
                          is a fraction in which--
                                      ``(I) the numerator is the 
                                  aggregate bases of the qualified 
                                  manufacturing and other productive 
                                  equipment properties placed in service 
                                  during such taxable year which are of 
                                  domestic origin, and
                                      ``(II) the denominator is the 
                                  aggregate bases of all qualified 
                                  manufacturing and other productive 
                                  equipment properties placed in service 
                                  during such taxable year.
                      ``(B) Nondomestic equipment credit.--
                              ``(i) In general.--The nondomestic 
                          equipment credit for any taxable year is 7 
                          percent of the amount equal to the product of--
                                      ``(I) the nondomestic equipment 
                                  ratio, and
                                      ``(II) the qualified increase 
                                  amount.
                              ``(ii) Nondomestic equipment ratio.--The 
                          nondomestic equipment ratio for any taxable 
                          year is a fraction in which--
                                      ``(I) the numerator is the 
                                  aggregate bases of the qualified 
                                  manufacturing and other productive 
                                  equipment properties placed in service 
                                  during such taxable year which are not 
                                  of domestic origin, and
                                      ``(II) the denominator is the 
                                  aggregate bases of all qualified 
                                  manufacturing and other productuve 
                                  equipment properties placed in service 
                                  during such taxable year.
                      ``(C) Determination of domestic origin.--
                              ``(i) In general.--Property shall be 
                          treated as being of domestic origin only if--
                                      ``(I) the property was completed in 
                                  the United States, and
                                      ``(II) at least 50 percent of the 
                                  basis of the property is attributable 
                                  to value added within the United 
                                  States.
                              ``(ii) United states.--The term `United 
                          States' includes the Commonwealth of Puerto 
                          Rico and the possessions of the United States.
              ``(3) Qualified manufacturing and other productive 
          equipment property.--For purposes of this subsection--
                      ``(A) In general.--The term `qualified 
                  manufacturing and other productive equipment property' 
                  means any property--
                              ``(i) which is used as an integral part of 
                          the manufacture or production of tangible 
                          personal property and increases the efficiency 
                          of the manufacturing or production process;
                              ``(ii) which is tangible property to which 
                          section 168 applies, other than 3-year property 
                          (within the meaning of section 168(e)),
                              ``(iii) which is section 1245 property (as 
                          defined in section 1245(a)(3)), and
                              ``(iv)(I) the construction, reconstruction, 
                          or erection of which is completed by the 
                          taxpayer, or
                              ``(II) which is acquired by the taxpayer, 
                          if the original use of such property commences 
                          with the taxpayer.
                      ``(B) Special rule for computer software.--In the 
                  case of any computer software--
                              ``(i) which is used to control or monitor a 
                          manufacturing or production process,
                              ``(ii) which increases the efficiency of 
                          the manufacturing or production process, and
                              ``(iii) with respect to which depreciation 
                          (or amortization in lieu of depreciation) is 
                          allowable,
                  such software shall be treated as qualified 
                  manufacturing and other productive equipment property.
              ``(4) Qualified increase amount.--For purposes of this 
          subsection--
                      ``(A) In general.--The term `qualified increase 
                  amount' means the excess (if any) of--
                              ``(i) the aggregate bases of qualified 
                          manufacturing and other productive equipment 
                          properties placed in service during the taxable 
                          year, over
                              ``(ii) the base amount.
                      ``(B) Base amount.--The term `base amount' means 
                  the product of--
                              ``(i) the fixed-base percentage, and
                              ``(ii) the average annual gross receipts of 
                          the taxpayer for the 4 taxable years preceding 
                          the taxable year for which the credit is being 
                          determined (in this subsection referred to as 
                          the `credit year').
                      ``(C) Minimum base amount.--In no event shall the 
                  base amount be less than 50 percent of the amount 
                  determined under subparagraph (A)(i).
                      ``(D) Fixed-base percentage.--
                              ``(i) In general.--The fixed-base 
                          percentage is the percentage which the 
                          aggregate amounts described in subparagraph 
                          (A)(i) for taxable years beginning after 
                          December 31, 1987, and before January 1, 1993, 
                          is of the aggregate gross receipts of the 
                          taxpayer for such taxable years.
                              ``(ii) Rounding.--The percentages 
                          determined under clause (i) shall be rounded to 
                          the nearest \1/100\ of 1 percent.
                      ``(E) Other rules.--Rules similar to the rules of 
                  paragraphs (4) and (5) of section 41(c) shall apply for 
                  purposes of this paragraph.
              ``(5) Coordination with other credits.--This subsection 
          shall not apply to any property to which the energy credit or 
          rehabilitation credit would apply unless the taxpayer elects to 
          waive the application of such credits to such property.
              ``(6) Certain progress expenditure rules made applicable.--
          Rules similar to rules of subsections (c)(4) and (d) of section 
          46 (as in effect on the day before the date of the enactment of 
          the Revenue Reconciliation Act of 1990) shall apply for 
          purposes of this subsection.
              ``(7) Termination date.--This subsection shall not apply to 
          any property placed in service after the expiration of the 2-
          year period beginning on the date of the enactment of this 
          Act.''
      (c) Technical Amendments.--
              (1) Clause (ii) of section 49(a)(1)(C) of such Code is 
          amended by inserting ``or qualified manufacturing and other 
          productive equipment property'' after ``energy property''.
              (2) Subparagraph (E) of section 50(a)(2) of such Code is 
          amended by inserting ``or 48(c)(6)'' before the period at the 
          end.
              (3)(A) The section heading for section 48 of such Code is 
          amended to read as follows:
  
  ``SEC. 48. OTHER CREDITS.''
  
              (B) The table of sections for subpart E of part IV of 
          subchapter A of chapter 1 of such Code is amended by striking 
          the item relating to section 48 and inserting the following:
  
  ``Sec. 48. Other credits.''
      (d) Effective Date.--The amendments made by this section shall 
  apply to--
              (1) property acquired by the taxpayer after the date of the 
          enactment of this Act, and
              (2) property the construction, reconstruction, or erection 
          of which is completed by the taxpayer after the date of the 
          enactment of this Act, but only to the extent of the basis 
          thereof attributable to construction, reconstruction, or 
          erection after such date.
target: Competitiveness Tax Credit Act - Amends the Internal Revenue Code to allow an investment tax credit for manufacturing and other productive equipment based upon a determination of the domestic origin of such property. 
  Makes such credit applicable for the two-year period beginning on the date of enactment of this Act.
feat_title: Competitiveness Tax Credit Act