Panama Canal Amendments Act of 1985

Panama Canal Amendments Act of 1985 - Amends the Panama Canal Act of 1979 to require the Panama Canal Commission to pay for damages to vessels which arise because of passage through the Panama Canal when the injury was proximately caused by negligence or fault on the part of a U.S. officer or employee acting within the scope of employment and in the line of duties in connection with the operation of the Canal. Deletes the provision which prohibits payment when the injury was proximately caused by the negligence or fault of the vessel, master, crew, or passengers. Prohibits payment of damages for claims of injuries in the locks of the Canal unless the claim is filed with the Panama Canal Commission within two years after the injury or within one year after enactment of this Act, whichever is later.

Authorizes the Commission to pay a claim for damages for injuries to a vessel or its cargo that occurred while the vessel was not under the control of a Panama Canal pilot if the amount of the claim is less than $50,000, unless the injuries were caused by another vessel under the control of a Panama Canal pilot.

Prohibits the Commission from being responsible for or from considering any claim for demurrage or delays caused by investigation of a marine accident that is conducted within 24 hours after the accident occurs, except that any liability of the Commission beyond that 24-hour period shall be limited to the extent the accident was caused, or contributed to, by the negligence of a Commission employee acting within the scope of the employee's duties.

Deletes the provision which requires the Commission to submit to the Congress claims which exceed $120,000. Authorizes the Commission to settle such claims. Permits claims for injuries to be paid only out of money appropriated or allotted for the maintenance and operation of the Panama Canal.

Authorizes claimants for injuries that occurred outside the locks of the Canal to bring an action against the Commission in the U.S. District Court for the Eastern District of Louisiana if the decision of the Commission does not satisfy the claimant. Authorizes payment of any judgment only out of money appropriated or allotted for the maintenance and operation of the Panama Canal. Requires that such action must be brought within one year after the Commission mails to the claimant written notification of the Commission's decision or within one year of enactment of this Act whichever is later.

Authorizes the Commission to purchase insurance to protect the Commission against major and unpredictable losses of revenue resulting from such accidents.