(a) Program Authority and Purpose.—The Secretary of Defense may use the National Guard to conduct a civilian youth opportunities program, to be known as the “National Guard Youth Challenge Program”, which shall consist of at least a 22-week residential program and a 12-month post-residential mentoring period. The Program shall seek to improve life skills and employment potential of participants by providing military-based training and supervised work experience, together with the core program components of assisting participants to receive a high school diploma or its equivalent, leadership development, promoting fellowship and community service, developing life coping skills and job skills, and improving physical fitness and health and hygiene.

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(b) Conduct of the Program.—(1) The Secretary of Defense shall provide for the conduct of the Program in such States as the Secretary considers to be appropriate.

(2) The Secretary shall carry out the Program using—

(A) funds appropriated directly to the Secretary of Defense for the Program, except that the amount of funds appropriated directly to the Secretary and expended for the Program in fiscal year 2001 or 2002 may not exceed $62,500,000; and

(B) nondefense funds made available or transferred to the Secretary of Defense by other Federal agencies to support the Program.

(3) Federal funds made available or transferred to the Secretary of Defense under paragraph (2)(B) by other Federal agencies to support the Program may be expended for the Program in excess of the fiscal year limitation specified in paragraph (2)(A).

(4) The Secretary of Defense shall remain the executive agent to carry out the Program regardless of the source of funds for the Program or any transfer of jurisdiction over the Program within the executive branch. As provided in subsection (a), the Secretary may use the National Guard to conduct the Program.

(c) Program Agreements.—(1) To carry out the Program in a State, the Secretary of Defense shall enter into an agreement with the Governor of the State or, in the case of the District of Columbia, with the commanding general of the District of Columbia National Guard, under which the Governor or the commanding general will establish, organize, and administer the Program in the State.

(2) The agreement may provide for the Secretary to provide funds to the State for civilian personnel costs attributable to the use of civilian employees of the National Guard in the conduct of the Program.

(d) Matching Funds Required.—(1) The amount of assistance provided by the Secretary of Defense to a State program of the Program for a fiscal year under this section may not exceed 75 percent of the costs of operating the State program during that fiscal year.

(2) The limitation in paragraph (1) may not be construed as a limitation on the amount of assistance that may be provided to a State program of the Program for a fiscal year from sources other than the Department of Defense.

(e) Persons Eligible To Participate in Program.—A school dropout from secondary school shall be eligible to participate in the Program. The Secretary of Defense shall prescribe the standards and procedures for selecting participants from among school dropouts.

(f) Authorized Benefits for Participants.—(1) To the extent provided in an agreement entered into in accordance with subsection (c) and subject to the approval of the Secretary of Defense, a person selected for training in the Program may receive the following benefits in connection with that training:

(A) Allowances for travel expenses, personal expenses, and other expenses.

(B) Quarters.

(C) Subsistence.

(D) Transportation.

(E) Equipment.

(F) Clothing.

(G) Recreational services and supplies.

(H) Other services.

(I) Subject to paragraph (2), a temporary stipend upon the successful completion of the training, as characterized in accordance with procedures provided in the agreement.

(2) In the case of a person selected for training in the Program who afterwards becomes a member of the Civilian Community Corps under subtitle E of title I of the National and Community Service Act of 1990 (42 U.S.C. 12611 et seq.), the person may not receive a temporary stipend under paragraph (1)(I) while the person is a member of that Corps. The person may receive the temporary stipend after completing service in the Corps unless the person elects to receive benefits provided under subsection (f) or (g) of section 158 of such Act (42 U.S.C. 12618).

(g) Program Personnel.—(1) Personnel of the National Guard of a State in which the Program is conducted may serve on full-time National Guard duty for the purpose of providing command, administrative, training, or supporting services for the Program. For the performance of those services, any such personnel may be ordered to duty under section 502(f) of this title for not longer than the period of the Program.

(2) A Governor participating in the Program and the commanding general of the District of Columbia National Guard (if the District of Columbia National Guard is participating in the Program) may procure by contract the temporary full time services of such civilian personnel as may be necessary to augment National Guard personnel in carrying out the Program in that State.

(3) Civilian employees of the National Guard performing services for the Program and contractor personnel performing such services may be required, when appropriate to achieve the purposes of the Program, to be members of the National Guard and to wear the military uniform.

(h) Equipment and Facilities.—(1) Equipment and facilities of the National Guard, including military property of the United States issued to the National Guard, may be used in carrying out the Program.

(2) Equipment and facilities of the Department of Defense may be used by the National Guard for purposes of carrying out the Program.

(3) Activities under the Program shall be considered noncombat activities of the National Guard for purposes of section 710 of this title.

(i) Status of Participants.—(1) A person receiving training under the Program shall be considered an employee of the United States for the purposes of the following provisions of law:

(A) Subchapter I of chapter 81 of title 5 (relating to compensation of Federal employees for work injuries).

(B) Section 1346(b) and chapter 171 of title 28 and any other provision of law relating to the liability of the United States for tortious conduct of employees of the United States.

(2) In the application of the provisions of law referred to in paragraph (1)(A) to a person referred to in paragraph (1)—

(A) the person shall not be considered to be in the performance of duty while the person is not at the assigned location of training or other activity or duty authorized in accordance with a Program agreement referred to in subsection (c), except when the person is traveling to or from that location or is on pass from that training or other activity or duty;

(B) the person’s monthly rate of pay shall be deemed to be the minimum rate of pay provided for grade GS-2 of the General Schedule under section 5332 of title 5; and

(C) the entitlement of a person to receive compensation for a disability shall begin on the day following the date on which the person’s participation in the Program is terminated.

(3) A person referred to in paragraph (1) may not be considered an employee of the United States for any purpose other than a purpose set forth in that paragraph.

(j) Supplemental Resources.—To carry out the Program in a State, the Governor of the State or, in the case of the District of Columbia, the commanding general of the District of Columbia National Guard may supplement funds made available under the Program out of other resources (including gifts) available to the Governor or the commanding general. The Governor or the commanding general may accept, use, and dispose of gifts or donations of money, other property, or services for the Program.

(k) Report.—Within 90 days after the end of each fiscal year, the Secretary of Defense shall submit to Congress a report on the design, conduct, and effectiveness of the Program during the preceding fiscal year. In preparing the report, the Secretary shall coordinate with the Governor of each State in which the Program is carried out and, if the Program is carried out in the District of Columbia, with the commanding general of the District of Columbia National Guard.

(l) Definitions.—In this section:

(1) The term “State” includes the Commonwealth of Puerto Rico, the territories, and the District of Columbia.

(2) The term “school dropout” means an individual who is no longer attending any school and who has not received a secondary school diploma or a certificate from a program of equivalency for such a diploma.

(3) The term “Program” means the National Guard Youth Challenge Program carried out pursuant to this section.

(m) Regulations.—The Secretary of Defense shall prescribe regulations to carry out the Program. The regulations shall address at a minimum the following:

(1) The terms to be included in the Program agreements required by subsection (c).

(2) The qualifications for persons to participate in the Program, as required by subsection (e).

(3) The benefits authorized for Program participants, as required by subsection (f).

(4) The status of National Guard personnel assigned to duty in support of the Program under subsection (g).

(5) The conditions for the use of National Guard facilities and equipment to carry out the Program, as required by subsection (h).

(6) The status of Program participants, as described in subsection (i).

(7) The procedures to be used by the Secretary when communicating with States about the Program.