(a) Payments required under Panama Canal Treaty; annual audit
The Commission shall pay to the Republic of Panama those payments required under paragraph 5 of Article III and paragraph 4 of Article XIII of the Panama Canal Treaty of 1977. Payments made under paragraph 5 of Article III of such Treaty shall be audited annually by the Comptroller General and any overpayment, as determined in accordance with Understanding (1) incorporated in the Resolution of Ratification of the Panama Canal Treaty (adopted by the United States Senate on April 18, 1978), for the services described in that paragraph which are provided shall be refunded by the Republic of Panama or set off against amounts payable by the United States to the Republic of Panama under paragraph 5 of Article III of the Panama Canal Treaty of 1977.
(b) Excess operating revenues
In determining whether operating revenues exceed expenditures for the purpose of payments to the Republic of Panama under paragraph 4(c) of Article XIII of the Panama Canal Treaty of 1977, such operating revenues in a fiscal period shall be reduced by
(1) all costs of such period as shown by the accounts established pursuant to section
3721 of this title, and
(2) the cumulative sum from prior years (beginning with the year in which the Panama Canal Treaty of 1977 enters into force) of any excess of costs of the Panama Canal Commission over operating revenues.
(c) Retroactive taxation
The President shall not accede to any interpretation of paragraph 1 of Article IX of the Panama Canal Treaty of 1977 which would permit the Republic of Panama to tax retroactively organizations and businesses operating, and citizens of the United States living, in the Canal Zone before October 1, 1979.
(d) Accumulated unpaid balances
Any accumulated unpaid balance under paragraph 4(c) of Article XIII of the Panama Canal Treaty of 1977 at the termination of such Treaty shall be payable only to the extent of any operating surplus in the last year of the Treaty’s duration, and nothing in such paragraph may be construed as obligating the United States to pay after the date of the termination of the Treaty any such unpaid balance which has accrued before such date.
(e) Toll rates; payment of costs of operation and maintenance of canal with unexpended funds
As provided in section
3792(b) of this title, tolls shall not be prescribed at rates calculated to cover payments to the Republic of Panama pursuant to paragraph 4(c) of Article XIII of the Panama Canal Treaty of 1977. Moreover, no payments may be made to the Republic of Panama under paragraph 4(c) of Article XIII of the Panama Canal Treaty of 1977 unless unexpended funds are used to pay all costs of operation and maintenance of the canal, including but not limited to
(1) operating expenses determined in accordance with generally accepted accounting principles,
(2) payments to the Republic of Panama under paragraphs 4(a) and 4(b) of such Article XIII and under paragraph (5) of Article III of such Treaty,
(3) amounts in excess of depreciation and amortization which are programed for plant replacement, expansion, and improvements,
(4) payments to the Treasury of the United States under section
3793 of this title,
(5) reimbursement to the Treasury of the United States for costs incurred by other departments and agencies of the United States in providing educational, health, and other services to the Commission, its employees and their dependents, and other categories of persons in accordance with section
3731 of this title,
(6) any costs of Treaty implementation associated with the maintenance and operation of the Panama Canal, and
(7) amounts programmed to meet working capital requirements.
The prohibitions contained in this section and in sections
3783 of this title shall apply notwithstanding any other provision of law authorizing transfers of funds between accounts, reprograming of funds, use of funds for contingency purposes, or waivers of prohibitions.
(g) Exemption from automatic budget cuts
Notwithstanding any other provision of law, no reduction under any order issued pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985 shall apply to the Commission if the implementation of such an order would result in a payment to the Republic of Panama under paragraph 4(c) of article XIII of the Panama Canal Treaty of 1977 and this section.
The Balanced Budget and Emergency Deficit Control Act of 1985, referred to in subsec. (g), is title II of Pub. L. 99–177, Dec. 12, 1985, 99 Stat. 1038, as amended, which enacted chapter 20 (§ 900 et seq.) and sections
656 of Title
2, The Congress, amended sections 602, 622, 631 to 642, and 651 to 653 ofTitle
1109 of Title 31, Money and Finance, and section
911 of Title
42, The Public Health and Welfare, repealed section
661 of Title
2, enacted provisions set out as notes under section
900 of Title
2 and section
911 of Title
42, and amended provisions set out as a note under section
621 of Title
2. For complete classification of this Act to the Code, see Short Title note set out under section
900 of Title
2 and Tables.
Pub. L. 105–261, div. C, title XXXV, § 3512(b),Oct. 17, 1998, 112 Stat. 2271, provided that the amendment made by section
3512(b) is effective as of Sept. 23, 1996, and as if included in section 3548(b)(3) of the Panama Canal Act Amendments of 1996, Pub. L. 104–201, as enacted.
Pub. L. 99–368, § 7,Aug. 1, 1986, 100 Stat. 777, provided that: “The amendment made by section
6 [amending this section] shall take effect with respect to fiscal year 1986 and subsequent fiscal years.”
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