Amends the Panama Canal Act of 1979 to authorize the Department of Defense to grant a quarters allowance to the following persons if adequate Government owned or leased quarters are not made available to them: (1) any Defense Department employee who is a U.S. citizen and who, before October 1, 1979, was employed by an agency in the area formerly known as the Canal Zone; and (2) any other Defense Department employee in the Canal Zone who is a U.S. citizen and who is or was recruited within the United States. Limits the amount of the quarters allowance.