Public Broadcasting Funding Act of 1985

Public Broadcasting Funding Act of 1985 - Amends the Communications Act of 1934 to authorize appropriations for: (1) the Public Broadcasting Fund for FY 1987 through 1990 to match up to a specified amount of non-Federal contributions to public broadcasting entities; and (2) FY 1985 through 1987 to be used by the Secretary of Commerce to assist in the planning and construction of public telecommunications facilities.

Directs the National Telecommunications and Information Administration to conduct a 36-month demonstration program to determine the feasibility of granting public television and radio station licensees discretionary authority to broadcast limited types of advertising announcements. Sets forth criteria by which the Administration shall select, from licensees expressing interest, 30 radio and 30 television station licensees to participate in the program. Restricts the scheduling and duration of advertisements. Bars political, religious, and editorial advertisements under such program.

Requires the Administration to analyze the results of the program and report to the Congress on: (1) the influence of the advertising on programming; (2) audience reaction; (3) business purchases of advertising; (4) the effectiveness of such advertising in providing funding; (5) negative economic impacts on commercial station advertising; and (6) recommendations concerning the permanent authorization of such advertising.

Repeals provisions earmarking a specified portion of appropriated funds for: (1) extending the delivery of public telecommunications services to new areas; and (2) Corporation for Public Broadcasting expenses of research, training, technical assistance, engineering, instructional support, and the payment of interest on indebtedness.

Repeals provisions requiring a public telecommunications entity to refund to the Corporation for Public Broadcasting an amount of Federal funds equal to the amount of any unrelated business income tax paid by such entity.