I
106TH CONGRESS
1ST SESSION
H. R. 3452
To establish conditions on the payment of certain balances under the Panama
Canal Act of 1979.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 18, 1999
Mr. BAKER (for himself, Mr. HUNTER, Mr. STUMP, Mr. TRAFICANT, Mr.
HEFLEY, Mr. COOKSEY, Mr. WAMP, Mrs. BONO, Mrs. CHENOWETH-
HAGE, Mr. BACHUS, Mrs. JOHNSON of Connecticut, Mr. SAM JOHNSON
of Texas, Mr. CUNNINGHAM, Mr. TAUZIN, and Mr. TANCREDO) intro-
duced the following bill; which was referred to the Committee on Armed
Services
A BILL
To establish conditions on the payment of certain balances
under the Panama Canal Act of 1979.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Panama Canal Secu-
rity Act of 1999’’.
SEC. 2. CONGRESSIONAL FINDINGS.
The Congress makes the following findings:
(1) The common interests of Panama and the
United States have produced close relations between
the two nations and a shared interest in protecting
the Canal and its operations.
(2) The United States helped secure the inde-
pendence of the Republic of Panama, built the Pan-
ama Canal at considerable cost in blood and treas-
ure, and has provided for its management, oper-
ations, maintenance, improvement, and defense
throughout the 20th century, providing a vital serv-
ice to the peaceful commerce of all nations as well
as substantial returns to the national interests of
both the United States and Panama.
(3) The United States purchased the Panama
Canal property for $40,000,000 (approximately
equal to $736,000,000 in 1999 dollars) and after 11
years of construction at a cost estimated to exceed
$387,000,000 
(approximately 
equal 
to
$6,500,000,000 in 1999 dollars), the Panama Canal
was opened to the seafaring world. Since the open-
ing of the first gate in 1914 the United States has
invested well over an additional $3,000,000,000 in
Canal facilities and infrastructure.
(4) The Panama Canal continues to play a vital
role both in international trade and in the national
security of the United States, reducing the distance
by sea between New York and San Francisco by
some 8,000 miles, contributing critical strategic mo-
bility to naval forces of the United States and sub-
stantial savings to maritime commerce.
(5) The 50-mile long Panama Canal, connecting
the Atlantic and Pacific Oceans, is a key strategic
choke point in the Western Hemisphere and is vital
to the United States and international economies
and remains a strategic passage for naval and com-
mercial vessels.
(6) Approximately one-third of the world’s econ-
omy is said to pass through the Canal each year-in-
cluding 15 percent of all United States trade. The
United States Navy makes over 200 passages
through the Canal annually. More than 15 percent
of goods entering or leaving the United States pass
through the canal, including 40 percent of United
States grain exports. Oil and oil products account
for as much as 17 percent of canal shipments. Ap-
proximately 670,000 barrels per day of oil and oil
products passed through the canal annually.
(7) Occupation, damage or destruction of this
crucial waterway by a hostile power could be calami-
tous to the United States in time of war or armed
conflict and could be devastating to the economy of
the United States during times of peace.
(8) A continued United States military presence
is critical to the future stability in this region as well
as the long-term economic and security interests of
the United States.
(9) Absent any new base-rights agreement be-
tween the United States Government and the Gov-
ernment of the Republic of Panama allowing for a
post-2000 United States military presence, United
States forces in Panama will be reduced to zero by
December 31, 1999, calling into question the ability
of the United States to continue to protect its inter-
ests in the region.
(10) In addition, article V of the Treaty Con-
cerning the Permanent Neutrality and Operation of
the Panama Canal, states that only the Republic of
Panama shall maintain military forces, defense sites,
and military installations in its national territory
after December 31, 1999. However, Panama does
not have an army, navy or air force, and the coun-
try’s national police units lack adequate training,
manpower, and equipment to deter heavily armed,
hostile narco-terrorist forces or to adequately defend
the Canal against sabotage or terrorism from inter-
nal or external threats.
(11) Panama and the United States are both
confronting growing problems with illegal drug traf-
ficking, money laundering, and narco-terrorism in
the Western Hemisphere, and those problems threat-
en peace and security in the region. As such, facili-
ties now utilized by the United States Armed Forces
in Panama are essential to the coordination of any
counter-narcotic efforts in the region.
(12) The United States and its military forces
have become forced to conduct aerial reconnaissance
missions and counter-narcotics training and oper-
ations from as far away as Oklahoma City, since
Howard Air Force Base was transferred to the Gov-
ernment of Panama on November 1, 1999. It pre-
viously served as the primary and vital United
States military infrastructure supporting assistance
to Latin American nations combating drug traf-
ficking through detection, monitoring, and intel-
ligence collecting assets.
(13) At the same time that the United States
is withdrawing from the region, the communist Peo-
ple’s Republic of China is making major political,
economic, and intelligence inroads into Latin Amer-
ica and the Caribbean, posing a long-term threat to
American security interests.
(14) Maintaining a regional presence in the
Panama region is a national security priority for the
United States.
(15) The funds controlled by the Panama Canal
Commission in excess of current commitments are
the property of the United States.
SEC. 3. CONDITIONS ON PAYMENT OF CERTAIN BALANCES
UNDER PANAMA CANAL ACT OF 1979.
Any accumulated unpaid balance referred to in sec-
tion 1341(d) of the Panama Canal Act of 1979 (22 U.S.C.
3751(d)) shall be payable only upon completion of an
agreement that—
(1) leases to the United States not less than 50
percent of Howard Air Force Base in Panama, in-
cluding a contiguous area containing all runways, air
traffic control facilities, and adjacent hangars; and
(2) grants to the United States the continuing
authority to ensure the proper disbursement and use
of the balance paid.
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