Economic Diversification Promotion Act of 1986

Economic Diversification Promotion Act of 1986 - Amends title III (Special Programs) of the Carl D. Perkins Vocational Education Act (the Act) to add a new part F: Industry-Education Partnership for Training and Retraining in Defense-Dependent Communities.

Directs the Secretary of Education to make grants to States to carry out industry-education partnership training programs in defense-dependent communities.

Provides that such funds will be used solely for vocational education programs designed to train and retrain workers at defense or defense-related industries or facilities and other workers in defense-dependent communities to allow such workers to find employment in nondefense or defense-related businesses or industries.

Requires coordination of part F programs with those under the Job Training Partnership Act and under title II (Basic State Grants for Vocational Education) of the Act. Requires active participation of State vocational education councils in developing part F programs.

Requires at least 50 percent of program funds from non-Federal sources, and 50 percent of such non-Federal funds from participating business and industries (through cash or in-kind contributions). Provides that the Federal share of program costs shall be available equally from part F funds and from funds allotted to States under title II of the Act. Provides for State designation of specified funds for program use if an eligible recipient demonstrates that it is incapable of providing its share.

Permits grant funds to be used solely for the part F programs already described and for: (1) limited administrative costs; (2) training and retraining of instructional and guidance personnel; (3) curriculum and materials development; and (4) other activities authorized under title III of the Act which may be essential to operating part F programs (including ensuring access of women, minorities, the handicapped, and the economically disadvantaged).

Sets forth guidelines for State board approval of part F programs.

Authorizes appropriations for part F programs for FY 1987 through 1989.