MISCELLANEOUS BILLS-PANAMA CANAL TUESDAY, APRIL 5, 1949 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE No. 4 OF THE COMMITTEE ON Washington, D. C. The subcommittee met at 10 a. m., pursuant to adjournment, for the further consideration of H. R. 3159, a bill to amend the Canal Zone Code, and for other purposes, Hon. Donald L. O'Toole (chairman of the subcommittee) presiding. H. R. 3159 Mr. O'TOOLE. The committee will continue this morning the hearings on H. R. 3159, a bill introduced by our chairman, Mr. Bland, for the purpose of amending the Canal Zone Code. (The bill referred to is as follows:) [H. R. 3159, 81st Cong., 1st sess.] A BILL To amend the Canal Zone Code, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That title 2 of the Canal Zone Code is amended by adding in chapter 1 thereof three new sections numbered 16 to 18, and reading as follows: "16. ACQUISITION OR CONSTRUCTION OF STRUCTURES, EQUIPMENT, AND IMPROVE MENTS, The Governor of the Panama Canal is authorized, within the limits of available funds, to purchase or otherwise acquire equipment, and within the Canal Zone to purchase or otherwise acquire, construct, repair, replace, alter, or enlarge any building, structure, or other improvement, when in his judgment such action is necessary for the operation, maintenance, sanitation, or civil government of the Panama Canal or Canal Zone. "17. CLAIMS FOR LOSSES OF OR DAMAGES TO PROPERTY.—Authority is hereby conferred upon the Governor of the Panama Canal, or his designee for the purpose, to consider, adjust, determine, and settle claims for losses of or damages to property arising from the conduct by the Panama Canal of authorized business operations, or arising from the maintenance, operation, improvement, or enlargement of capacity of the Panama Canal or from the sanitation or civil government of the Canal Zone: Provided, however, That this section shall not apply to claims cognizable either under section 10 of this title, as amended, or under the Federal Tort Claims Act. "Any award made to any claimant pursuant to this section shall be payable out of any moneys appropriated or made available for the maintenance and operation, sanitation, and civil government of the Panama Canal and Canal Zone; and the acceptance by the claimant of any such award shall be final and conclusive on the claimant, and shall constitute a complete release by the claimant of such claim against the United States. "18. DISASTER RELIEF.-In the event of emergency arising because of disaster or calamity by flood, hurricane, earthquake, fire, pestilence, or like cause, not foreseen or otherwise provided for, and occurring in the Canal Zone, or occurring in the Republic of Panama in such circumstances as to constitute an actual or 23 potential hazard to health, safety, security, or property in the Canal Zone, the Governor of the Panama Canal is authorized to expend available funds and to utilize or furnish materials, supplies, equipment, and services for relief, assistance, and protection." SEC. 2. Chapter 4 of title 2, Canal Zone Code, which chapter is now entitled "Business Operations" and consists of sections 51 and 52 of said title 2, is amended to read as follows: "Sec. "CHAPTER 4-BUSINESS OPERATIONS; SALES AND SERVICES "51. Authorization for establishment and operation of various facilities. "52. Organization and conduct of any such facilities by Panama Canal as 'business operations.' 53. Receipts from such operations, sales, and services; expenditure and reinvestment; reports. "54. Exception of Canal Zone postal service. "SEC. 51. AUTHORIZATION FOR ESTABLISHMENT AND OPERATION OF VARIOUS FACILITIES. (a) In connection with the operation, maintenance, sanitation, and civil government of the Panama Canal and Canal Zone, the President is authorized to establish, maintain, and operate through the Panama Railroad Company or otherwise, docks, wharves, piers, drydocks, shops, yards, marine railways, salvage and towing facilities, dredging facilities, construction facilities, fuel-handling facilities, motor-transportation facilities, civil air terminals, power systems, water and sewer systems, warehouses, storehouses, hotels, a printing plant, living quarters and other buildings, and any other necessary facilities and appurtenances, for the purpose of providing, at reasonable prices, fuel, electric power, water, equipment, supplies and materials generally, repairs, labor transportation, quarters, space in buildings, wharf and like services, hotel and restaurant services, and services, generally, including recreational services, and for the purpose of assembling, assorting, storing, repairing, and selling scrap and other byproducts of manufacturing and shop operations, and materials, supplies, and equipment purchased or acquired for the construction, improvement, operation, maintenance, sanitation, or civil government of the Panama Canal or Canal Zone and which are obsolete, unserviceable, or no longer needed. The sales, services, equipment, supplies, and materials hereinbefore referred to may be made or furnished to vessels, to agencies of the Government of the United States, to the Panama Railroad Company, to employees of the Government of the United States or of the Panama Railroad Company, and to any other governments, agencies, persons, corporations, companies, or associations eligible to make or receive such purchases, services, supplies, or materials under the laws prevailing at the time and the policies heretofore or hereafter adopted consistently with such laws. "(b) In the event the President has heretofore elected or shall at any time hereafter elect to maintain and operate through the Panama Railroad Company any of the facilities and appurtenances referred to in this section or section 52 of this title, theretofore maintained and operated by the Panama Canal, the President is authorized to transfer to the Panama Railroad Company all or as much as may be determined to be necessary of the personnel, property, records, related assets, contracts, obligations, and liabilities of or appertaining to the said facility and its appurtenances, and such transfer shall be deemed to have been accepted and assumed by the Panama Railroad Company without the necessity of any act or acts on the part of the said Corporation except as otherwise stipulated in provisions of law applicable to the said Corporation. "52. ORGANIZATION AND CONDUCT OF ANY SUCH FACILITIES BY PANAMA CANAL AS 'BUSINESS OPERATIONS'.-The President may cause any or all of the facilities and appurtenances referred to in paragraph (a) or (b) of section 51 of this title to be organized and conducted by the Panama Canal as ‘business operations', and in such case the aggregate net profit if any accruing from the conduct of such business operations shall annually be covered into the Treasury of the United States. 53. RECEIPTS FROM SUCH OPERATIONS, SALES, AND SERVICES; EXPENDITURE AND REINVESTMENT; REPORTS.-The moneys received by the Panama Canal from the operations authorized by sections 51 and 52 of this title, and from pilotage, quarantine, immigration, and like services, from rentals, from damage claims, and from any and all other sales made and services rendered, but not including tolls, taxes, court fees, or fines, may be expended or reinvested under the several heads of appropriation for the Panama Canal, without being covered into the Treasury of the United States except as provided in section 52 of this title; but, except as otherwise provided in this section, such funds shall be subject to the provisions of law relating to public funds of the United States. Monthly reports of such receipts and expenditures shall be made to the President and annual reports shall be made to the Congress. "54. EXCEPTION OF CANAL ZONE POSTAL SERVICE. The provisions of sections 51 to 53 of this title shall have no application to operations of the Canal Zone Postal Service." SEC. 3. Title 2 of the Canal Zone Code is amended by adding in article 1 of chapter 6 thereof a new section numbered 85 and reading as follows: "85. SPECIAL TRAINING OF EMPLOYEES.-The Governor of the Panama Canal is authorized, within the limits of appropriations made therefor, to provide for special training in the United States or elsewhere of any employee of the Panama Canal when in the judgment of the Governor such special training will be of material benefit to the work of the Panama Canal and the special training of such employee would be more advantageous than the hiring of other available personnel having the specialized skill or experience desired.. During the period of such special training the employee may be paid his regular compensation and his travel expenses in accordance with the Standardized Government Travel Regulations and the Subsistence Expense Act of 1926, as amended, subject to recovery by the United States of such costs or an equitable portion thereof, as determined by the Governor, in case the employee fails to complete such training or is separated from the service except for reasons beyond his control within one year following the completion of the period of training." SEC. 4. Title 2 of the Canal Zone Code is amended by adding in article 3 of chapter 6 thereof a new section numbered 124 and reading as follows: "124. EMPLOYEES INJURED PRIOR TO SEPTEMBER 7, 1916; APPLIANCES; LUMPSUM PAYMENTS.-The Governor of the Panama Canal is authorized to purchase artificial limbs or other appliances for persons who were injured in the service of the Isthmian Canal Commission or of the Panama Canal prior to September 7, 1916, and to make payments in lump sums not exceeding the amounts authorized by the Act of September 7, 1916, as amended (U. S. C., title 5, ch. 15), to alien cripples who are now a charge upon the Panama Canal by reason of injuries sustained while employed in the construction of the Panama Canal." SEC. 5. Title 6 of the Canal Zone Code is amended by adding in chapter 27 thereof a new section numbered 906 and reading as follows: "906. CLOTHING AND MONEY FOR DISCHARGED PRISONERS.-On the discharge of a prisoner from any penal institution in the Canal Zone such prisoner may, in the discretion of the Governor of the Panama Canal, be furnished with such suitable clothing as may be authorized by the Governor, and an amount of money not exceeding $20." Mr. O'TOOLE. I believe we will hear first from Mr. Burdick. STATEMENT OF BERNARD F. BURDICK, CHIEF OF OFFICE, THE PANAMA CANAL Mr. BURDICK. Bill H. R. 3159 is similar to H. R. 5103, Eightieth Congress, and is identical with S. 2829, that passed the Senate on June 12, 1948, and was referred to your committee on June 14, 1948. The general purpose of the proposed legislation is to establish appropriate and adequate authority in substantive law to support operations now conducted by the Panama Canal and the procedures now followed, and the appropriation of funds for such operations and procedures, which are now covered in part by substantive legislation and in part by provisions in appropriation acts. During the Seventy-ninth Congress Chairman Cannon of the House Appropriations Committee advised the executive department of the Government that the committee was inconvenienced by the number of provisions carried in the appropriation bills for the various agencies which were subject to a point of order unless covered by special rule by the Rules Committee. At his request the heads of executive departments and establishments were requested by the Bureau of the Budget to review the appropriation language and to submit proposed legislation necessary to support appropriation provisions required on a permanent basis for the operation of such establishments. The provisions of this bill have been discussed with the representatives of the General Accounting Office and the Bureau of the Budget, and the agencies are in agreement on all the provisions of the bill with one minor exception. In the section-by-section discussion of the bill, I will show the existing legislative status of the several matters involved.' Section 1 of the bill would add to the Canal Zone Code a section 16 of title 2, authorizing the Governor, within the limits of available funds, to purchase, or otherwise acquire, construct, repair, replace, alter, or enlarge any building, structure, equipment, or other improvement, when in his judgment such action is necessary for the operation, maintenance, sanitation or civil government of the Panama Canal or the Canal Zone. The purpose of proposed section 16 is to provide the necessary support for the item in present Panama Canal appropriations [reading]: purchase, construction, repair, replacement, alteration, or enlargement of buildings, structures, equipment, and other improvements— and so forth. The following explanatory statement was made to the House Committee on Appropriations by former Governor Ridley in support of the quoted item when it was first included in the War Department Civil Appropriations Act for the fiscal year 1940: The purpose of this amendment is to meet objections raised by the Comptroller General. He has questioned the use of Canal appropriations for constructing buildings and other improvements because specific authority cannot be cited in the Canal Appropriation Act authorizing such expenditures, notwithstanding the fact that the Panama Canal has for many years constructed such buildings and improvements with funds appropriated for the maintenance and operation of the Canal in conformity with estimates for such improvements specifically submitted to Congress each year and explained in detail to the Bureau of the Budget and the Appropriations Committee. The amendment will make no change whatever in the practice that has been followed for many years, and its only purpose is to meet the technical objections of the Comptroller General. The purpose of this amendment has the approval of the Bureau of the Budget, as shown in House Document No. 206, Seventy-sixth Congress, first session, by which the President submitted a supplemental estimate for the fiscal year 1940. It is believed that the language should be continued from year to year and should properly be inserted in the place suggested above. The continued efficient and economical operation of the Panama Canal and its appurtenances is dependent upon maintaining all facilities at a high standard. Many structures erected during the early years of Canal operation are reaching an advanced stage of deterioration, equipment must be replaced due to obsolescence or inability to meet increased loads, and existing facilities require improvements due to changes in procedure to incorporate modern methods in operations. To assist the Canal administration in exercising intelligent management with respect to scheduling replacements and improvements, an advance plan of future requirements is maintained. The plan is revised annually and careful attention is given to insure inclusion of all projects that can be foreseen will be needed for the future efficient operation of the Canal. The entire program is coordinated and priori ties for the projects are assigned on the basis of providing the greatest improvement to the operation of the Canal as a whole. The major items submitted each year in the budget estimates are selected from the projects carried in the advance plan. During the war period just past the need to make all Canal facilities available for work pertaining to the war effort forced the cancellation of many projects listed for those years and the partial abandonment of the advance plan as such. With the end of the war and the return of operations to normal peacetime levels, it is possible to reconsider suspended projects and to envisage more clearly the future long-term needs of the Canal. I mention these things to show that this is the procedure that has been in operation for many years. Section 1 of the bill would also add to the Canal Zone Code a section 17 of title 2, authorizing the Governor, or his designee for the purpose, to adjust and pay claims for losses of or damages to property arising from the conduct by the Panama Canal of authorized business operations, or arising from the maintenance, operation, improvement, or enlargement of capacity of the Panama Canal or from the sanitation or civil government of the Canal Zone, subject to the proviso, however, that the added section shall not apply to claims cognizable either under section 10 of tile 2, as amended, or under the Federal Tort Claims Act. The purpose of the proposed section is to provide substantive support for items of appropriation for the Panama Canal which have been in the appropriation language in substantially their present form since 1916, and which read as follows: claims for losses of or damages to property arising from the conduct of authorized business operations; claims for damages to property arising from the maintenance and operation, sanitation, and civil government of the Panama Canal, and construction of additional facilities and so forth. Section 10 of title 2, as amended by act of June 13, 1940, chapter 358, section 1-48 U. S. C. 1319-provides for the adjustment and payment of claims for injuries to vessels, cargo, crew, or passengers occasioned by operation of the Canal; and the exception of claims so arising is of course necessary to preserve intact section 10 as amended. The Federal Tort Claims Act covers claims for property loss or damage or personal injury or death caused by the negligent or wrongful act or omission of any employee while in the scope of his employment under circumstances where the United States, if a private person, would be liable, except that it does not apply to claims arising in a foreign country. Proposed section 17 will serve to cover tort claims arising in the Republic of Panama, and that is one of the essential reasons for the section. Various operations are conducted by the Panama Canal in the Republic of Panama, particularly in the cities of Panama and Colon. Motor vehicles of the transportation division operate freely and necessarily in the Republic of Panama, and such operation would involve the bulk of the claims arising in the Republic of Panama. It is thought essential that the authority to settle such claims be continued and to achieve that end proposed section 17 is deemed far more appropriate than an extension of the Tort Claims Act, with its provisions for resort to United States district courts. |