Panama Canal Commission Authorization Act, Fiscal Year 1997

Panama Canal Commission Authorization Act, Fiscal Year 1997 - Authorizes the Panama Canal Commission to make expenditures as necessary for the operation, maintenance, improvement, and administration of the Panama Canal for FY 1997. Makes funds available for the purchase, and transportation to Panama, of passenger motor vehicles.

Amends the Panama Canal Act of 1979 (the Act) to: (1) remove certain definitions and recommendations for legislation; (2) abolish the Office of the Ombudsman within the Commission; (3) revise provisions concerning the appointment, compensation, and duties of Commission employees; (4) make inapplicable to non-U.S.-citizen Commission employees certain Federal compensation, health, and retirement benefits; and (5) revise the travel and transportation expenses authorized for Commission employees.

Directs the Commission (currently, the President and Federal agency heads, respectively) to establish a Panama Canal Employment System and Commission employment standards.

Repeals provisions: (1) concerning the interim application of the Canal Zone Merit System and the authority for additional pay to employees recruited and retained for employment in the Canal Zone; (2) authorizing the purchase of artificial limbs and other appliances for Commission employees injured before September 7, 1916; (3) authorizing employee leave for jury or witness duty or services; (4) providing for the deposit of remaining Canal Zone Government funds; (5) requiring the Comptroller General to take into consideration, during Commission audits, certain conversion problems of the accounting system of the Panama Canal Company; (6) authorizing the Commission to adjust Canal Zone toll charges; (7) authorizing the President and the Commission to prescribe regulations concerning the operation and protection of the Panama Canal Zone; (8) applicable during a prior transition period; (9) authorizing appropriations for the disinterment, transportation, and reinterment in the United States of the remains of former Commission employees; and (10) providing for the compensation level of U.S. military personnel serving in a Commission position.

Establishes a Central Examining Office to implement provisions relating to Commission employee recruitment, examination, and qualification standards.

Provides for the applicability to the Commission of specified Federal laws.

Revises provisions concerning: (1) the administration of disability benefits to former Commission employees; and (2) the establishment of, and deposit of funds into, the Panama Canal Revolving Fund.

Authorizes the Commission to make direct purchase of printing and related services and to provide air transportation for Commission officials and employees.

Requires: (1) the Commission to take possession and administer the funds of the Canal Zone postal service; and (2) Commission investigation of accident claims to include a hearing by the Commission's Board of Local Inspectors.

Authorizes the Commission (currently, the President) to prescribe regulations governing the operation of the Canal and the navigation of adjacent waters.