Paperwork and Regulatory Simplification Act of 1986

Paperwork and Regulatory Simplification Act of 1986 - Repeals data collection requirements for the Department of Commerce regarding: (1) the decennial census of drainage; and (2) specified obsolete weights and measures standards. Repeals a regulatory condition regarding the disposal of Federal property overseas.

Amends the General Education Provisions Act to repeal: (1) data collection requirements for the Department of Education regarding financing of elementary and secondary education; and (2) certain review procedures which overlap those of another agency.

Amends the Federal Power Act to authorize the Federal Energy Regulatory Commission to exempt hydroelectric power projects from certain regulatory requirements.

Eliminates the following requirements for the Department of Energy: (1) quarterly data collection with respect to oil reserves and production; (2) a tracking system for coal and oil exports; (3) data collection on electric utility services; (4) biennial and quadrennial reviews of certain electric utility practices; and (5) annual reports by officers of electric utilities regarding interlocking directorships.

Amends various Acts relating to the Department of Health and Human Services to allow for-profit organizations to compete for grants and to eliminate specified regulatory requirements.

Amends the Outer Continental Shelf Lands Act to eliminate the requirements for the Department of the Interior to enforce maximum rates of oil and gas production. Eliminates the requirement that all offshore oil and gas equipment be marked with identification.

Eliminates the requirement for the Secretary of Transportation to inspect each highway construction project.

Amends the Internal Revenue Code to make numerous regulatory changes with respect to the processing of alcoholic beverages.

Amends the Federal Property and Administrative Services Act of 1949 to change the threshold for required antitrust advice from the Attorney General to the General Services Administration concerning the disposal of real property.

Repeals the requirement for the International Trade Commission to collect annual data on broom consumption.

Eliminates the requirement for applicants for National Science Foundation scholarships to submit loyalty oaths.