Refugee Assistance Extension Act of 1986

Refugee Assistance Extension Act of 1986 - Amends the Immigration and Nationality Act to authorize FY 1987 and 1988 appropriations for: (1) refugee assistance; (2) medical screening and initial medical costs; (3) job training; and (4) local reimbursement for costs incurred in incarcerating specified Cuban nationals (as provided for by this Act).

Authorizes the Secretary of Education (presently the Director of the Office of Refugee Resettlement (ORR)) to make grants for special educational programs for refugee children.

Requires the Director to take into account population, public and private resources (including housing and employment), and secondary migration in determining refugee placement. Requires State consultation prior to such placement.

Requires the Comptroller General to directly audit FY 1986 and 1987 initial resettlement grants. Requires a recipient agency (in addition to existing provisions) to: (1) provide quarterly performance and finance reports; (2) notify, upon request, local welfare offices of any cash assistance provided directly by such agency to a refugee; (3) insure that refugees with medical conditions affecting the public health report to the appropriate health authorities in their resettlement areas; (4) fulfill its responsibility for a refugee's basic living costs, including training and job interview transportation; and (5) report annually to the administering Federal agency and the appropriate congressional committees regarding refugee placement, expenditures, and other related program information.

Establishes performance criteria for such grants.

Requires the United States Coordinator for Refugee Affairs to study and report to the Congress within six months on the advisability of competitive bidding, financial incentives, and eligibility changes in such grant program.

Provides that: (1) social service allocations shall be based on the total number of refugees in a State who arrived in the United States not more than 36 months before the beginning of such fiscal year; and (2) any limitation of the proportion of such funds allocated to a State shall not apply if the Director receives a plan and determines that such plan provides maximum employment-related services and job placements under specified standards of the Job Training Partnership Act.

Maintains ORR matching grant funding at FY 1985 levels.

Authorizes grants for local areas with high refugee concentrations. States that such grants shall supplement other funds and be used primarily for refugee employment.

Terminates refugee cash assistance for three months for refusal to accept employment (six months for subsequent refusals).

Authorizes alternative projects to cover specific groups of refugees who: (1) have been in the United States for at least 36 months; and (2) have been significantly and disproportionately dependent on welfare.

Prohibits the use of block or consolidated grants as a refugee funding mechanism.

Directs the Attorney General to reimburse State and local governments for their costs in incarcerating certain Cuban nationals who were allowed U.S. entry in 1980 and who were subsequently convicted of violating State or county law. Limits such compensation authority to appropriated funds. States that U.S. priority policy shall be to seek the expeditious removal and return to Cuba of such Cuban nationals.