National Higher Education and Economic Development Act of 1985

National Higher Education and Economic Development Act of 1985 - Allows an eligible institution (as defined under specified provisions of the Higher Education Act of 1965) or consortium of institutions to apply for assistance under this Act to support one or more of the following: (1) planning and research (including applied research) to solve local economic development problems and to compliment local initiatives to promote growth and improve productivity; (2) resource exchange to encourage the exchange of faculty, government, and business experts to support economic development; and (3) special projects for economic or national economic development issues, are innovative in approach, and hold promise of application beyond the area served. Includes among such special projects which may be supported: (1) applying technology research to manufacturing aspects of mature industries in a region or State; (2) designing and developing university-based technical assistance centers to provide an integrated program of education, research, and technology transfer to business and industry; (3) projects to support entrepreneurship training and technical assistance; and (4) projects to develop new approaches or compliment efforts to explore, expand, and foster opportunities for international business and trade.

Authorizes the Secretary of Education (the Secretary) to make a limited number of grants (in addition to the other assistance for allowable activities under this Act) to identify and disseminate effective models and techniques which use partnerships of postsecondary education institutions and others involved in economic development to support lasting economic improvement.

Limits the maximum amount of any planning and research and/or resource exchange grant to a single eligible institution (but not to a consortium) under this Act.

Sets forth conditions for eligibility for planning and research, resource exchange, or special project grants under this Act. Requires the eligible institution (or consortium of such institutions) to demonstrate in its application that the program to be supported will involve active participation and commitment of resources and personnel by one or more of the following organizations: (1) local and State governments; (2) business or industry; (3) labor unions or union representatives; or (4) nonprofit organizations concerned with economic development in the area to be served. Sets forth other application requirements, including applicant descriptions of: (1) how the plan fits into the overall economic development and/or redevelopment plan for the area to be served, contributes to long-term economic growth and employment opportunities, and furthers the goals of the postsecondary education institutions; and (2) the consultation and, if appropriate, coordination with other Federal and State economic development efforts such as the Job Training Partnership Act and Department of Commerce programs. Authorizes the Secretary to waive a certain matching contribution for the applicant and other participating organizations requirement with respect to an eligible institution that demonstrates a unique hardship that precludes compliance with such requirement.

Sets forth provisions for selection of grant recipients. Directs the Secretary to designate a peer review panel of experts in the field of higher education and economic development to review applications and make recommendations for funding to the Secretary. Requires the Secretary, in selecting the panel, to consult with other appropriate Cabinet-level officials and non-Federal organizations to ensure that the panel will be geographically balanced and composed of representatives from public and private higher education, labor, business, and State and local government who have expertise in the area of economic development.

Allows grants under this Act to be made on a multiyear basis, but prohibits any institution, individually or as a participant in a combination of such institutions, from receiving such a grant for more than five years.

Requires the Secretary, in making awards for activities under planning and research and/or resource sharing grants, to give special consideration to applications which: (1) propose to serve an area with an unemployment rate one percent above the national rate or an area which has experienced or is about to experience sudden economic dislocation resulting in significant job loss in terms of numbers of jobs eliminated and effect upon the area's employment rate; (2) is submitted by a consortia of postsecondary education institutions (including four- and two-year or public and private postsecondary education institutions), and provide a regional geographic approach to solving economic development problems; (3) develops approaches which promote economic diversification for rural areas; and (4) involves in the participation of the proposed activities several of the other types of organizations described under eligibility provisions.

Authorizes appropriations for FY 1986 through 1990 for grants under this Act.