A bill to promote increased ocean transportation of bulk commodities in the foreign commerce of the United States in United States-flag ships, to strengthen the defense industrial base, and for other purposes.

Title I: Competitive Shipping and Shipbuilding - Competitive Shipping and Shipbuilding Act of 1984 - Requires that five percent of all bulk cargoes imported into or exported from the United States by water be carried on U.S.-flag ships. Requires yearly one percent increases until the percentage of bulk cargoes carried on U.S.-flag ships reaches 20 percent. Prohibits importers or exporters from avoiding such requirements by the terms of sale of such cargoes.

Authorizes the Secretary of Transportation to provide relief from the requirements of this Act upon a finding that U.S.-flag ships are not available within guideline rates. Sets forth factors which the Secretary shall consider in determining the extent of relief granted.

Requires the Secretary to establish and publish guideline rates for the carriage of bulk cargoes subject to this Act. Requires the Secretary to assure that such rates take into account certain objectives.

Requires the Secretary, in order to establish guideline rates, to estimate the current cost of operating U.S.-flag ships in the foreign bulk trades of the United States and of constructing such ships. Requires such cost estimates to be published within six months after enactment of this Act. Requires such estimates to be revised annually.

Requires that such rates: (1) be reviewed and adjusted at least annually; (2) not reflect costs greater than the estimated current costs; and (3) be the maximum rates which may be charged for the charter of U.S.-flag ships for the transportation of bulk cargoes governed by this Act.

Requires the Secretary to establish and publish interim guideline rates in the first calendar year following the enactment of this Act. Sets forth factors to be taken into account in determining such rates.

Requires importers or exporters to report to the Secretary on the percentages of exports and imports carried on U.S.-flag ships. Requires anyone who fails to transport the required percentage of U.S. bulk cargoes to use exclusively U.S. flag ships until the deficiency has been recouped, unless Secretarial relief has been granted.

Establishes civil penalties for violations of this Act. Sets forth procedures for the investigation, prosecution, and judicial review of violations of this Act.

Title II: Income Tax Credit for Increased Shipping Costs - United States-Flag Ship Use Incentive Tax Act of 1985 - Amends the Internal Revenue Code to allow a tax credit for 100 percent of the qualified increased shipping costs where importers and exporters use U.S.-flag ships. Provides for carryover of such credit for up to three years.