‘‘(5) The extent to which participants of the na-
tional service program are recruited from among
residents of the communities in which projects are to
be conducted, and the extent to which participants
and community residents are involved in the design,
leadership, and operation of the program.
‘‘(6) The extent to which projects would be con-
ducted in the following areas where they are needed
most—
‘‘(A) communities designated as enterprise
zones or redevelopment areas, targeted for spe-
cial economic incentives, or otherwise identifi-
able as having high concentrations of low-
income people;
‘‘(B) 
areas 
that 
are 
environmentally
distressed;
‘‘(C) areas adversely affected by Federal
actions related to the management of Federal
lands that result in significant regional job
losses and economic dislocation;
‘‘(D) areas adversely affected by reductions
in defense spending or the closure or realign-
ment of military installations;
‘‘(E) rural areas adversely affected by un-
fair trading practices of international competi-
tors of the United States; or
‘‘(F) areas that have an unemployment
rate greater than the national average unem-
ployment for the most recent 12 months for
which satisfactory data are available.
‘‘(7) In the case of applicants other than
States, the extent to which the application is consist-
ent with the application under section 130 of the
State in which the projects would be conducted.
‘‘(8) Such other criteria as the Corporation con-
siders to be appropriate.
‘‘(d) OTHER CONSIDERATIONS.—
‘‘(1) GEOGRAPHIC
DIVERSITY.—The Corpora-
tion shall ensure that recipients of assistance pro-
vided under section 121 are geographically diverse
and include projects to be conducted in those urban
and rural areas in a State with the highest rates of
poverty.
‘‘(2) PRIORITIES.—The Corporation may des-
ignate, under such criteria as may be established by
the Corporation, certain national service programs
or types of national service programs described in
section 122(a) for priority consideration in the com-
petitive 
distribution 
of 
funds 
under 
section
129(d)(2). In designating national service programs
to receive priority, the Corporation may include—
‘‘(A) national service programs carried out
by another Federal agency;
‘‘(B) national service programs that con-
form to the national service priorities in effect
under section 122(c);
‘‘(C) innovative national service programs;
‘‘(D) national service programs that are
well established in one or more States at the
time of the application and are proposed to be
expanded to additional States using assistance
provided under section 121;
‘‘(E) grant programs in support of other
national service programs if the grant programs
are to be conducted by nonprofit organizations
with a demonstrated and extensive expertise in
the provision of services to meet human, edu-
cational, environmental, or public safety needs;
and
‘‘(F) professional corps programs described
in section 122(a)(8).
‘‘(e) EMPHASIS ON AREAS MOST IN NEED.—In mak-
ing assistance available under section 121 and in providing
approved national service positions under section 123, the
Corporation shall ensure that not less than 50 percent of
the total amount of assistance to be distributed to States
under subsections (a) and (d)(1) of section 129 for a fiscal
year are provided to carry out or support national service
programs and projects that—
‘‘(1) are conducted in areas of economic dis-
tress described in subsection (c)(6) or on Federal or
other public lands to address unmet human, edu-
cational, environmental, or public safety needs in
such areas; and
‘‘(2) place a priority on the recruitment of par-
ticipants who are residents of areas of economic dis-
tress described in subsection (c)(6) or Federal or
other public lands.
‘‘(f) REJECTION OF STATE APPLICATIONS.—
‘‘(1) NOTIFICATION OF STATE APPLICANTS.—If
the Corporation rejects an application submitted by
a State Commission under section 130 for funds de-
scribed in section 129(a)(1), the Corporation shall
promptly notify the State Commission of the reasons
for the rejection of the application.
‘‘(2) RESUBMISSION AND RECONSIDERATION.—
The Corporation shall provide a State Commission
notified under paragraph (1) with a reasonable op-
portunity to revise and resubmit the application. At
the request of the State Commission, the Corpora-
tion shall provide technical assistance to the State
Commission as part of the resubmission process.
The Corporation shall promptly reconsider an appli-
cation resubmitted under this paragraph.
‘‘(3) REALLOTMENT.—The amount of any
State’s allotment under section 129(a) for a fiscal
year that the Corporation determines will not be
provided for that fiscal year shall be available for
distribution by the Corporation as provided in para-
graph (4) of such subsection.
‘‘SEC. 134. EVALUATION OF SUCCESS OF INVESTMENT IN
NATIONAL SERVICE.
‘‘(a) EVALUATION REQUIRED.—Not later than two
years after the date of the enactment of this section, the
Corporation shall arrange for the independent evaluation
of the operation of this subtitle to determine the levels
of participation of economically disadvantaged individuals
in national service programs carried out or supported
using assistance provided under section 121.
‘‘(b) PERIOD COVERED BY EVALUATION.—The eval-
uation required by this section shall cover the two-year
period beginning on the date the Corporation first makes
a grant under section 121.
‘‘(c) INCOME LEVELS OF PARTICIPANTS.—The evalu-
ating entity shall determine the total income of each par-
ticipant who serves, during the period covered by the eval-
uation, in a national service program carried out or sup-
ported using assistance provided under section 121 or in
an approved national service position. The total income
of a participant shall be determined as of the date the
participant was first selected to participate and shall in-
clude family total income unless the evaluating entity de-
termines that the participant was independent at the time
of selection.
‘‘(d) ASSISTANCE
FOR DISTRESSED AREAS.—The
evaluating entity shall also determine the amount of as-
sistance provided under section 121 during the period cov-
ered by the report that has been expended for projects
conducted in areas of economic distress described in sec-
tion 133(c)(6).
‘‘(e) REPORT.—The evaluating entity shall submit a
report containing the results of the evaluation to the
President, the Congress, the Corporation, and each State
Commission.
‘‘(f) DEFINITIONS.—For purposes of this section:
‘‘(1) The term ‘total income’ has the meaning
given that term in subsection (a) of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1087vv).
‘‘(2) The term ‘independent’ has the meaning
given that term in subsection (d) of such section.
‘‘PART III—NATIONAL SERVICE PARTICIPANTS
‘‘SEC. 137. DESCRIPTION OF PARTICIPANTS.
‘‘(a) IN GENERAL.—For purposes of this subtitle, an
individual shall be considered to be a participant in a na-
tional service program carried out using assistance pro-
vided under section 121 if the individual—
‘‘(1) meets such eligibility requirements as may
be established by the program;
‘‘(2) is selected by the program to serve in a po-
sition with the program;
‘‘(3) will serve in the program for a term of
service specified in section 139 to be performed be-
fore, during, or after attendance at an institution of
higher education;
‘‘(4) is 17 years of age or older at the time the
individual begins the term of service;
‘‘(5) has received a high school diploma or its
equivalent, agrees to obtain a high school diploma or
its equivalent (unless this requirement is waived
based on an individual education assessment con-
ducted by the program) and the individual did not
drop out of an elementary or secondary school to en-
roll in the program, or is enrolled in an institution
of higher education on an ability to benefit basis and
is considered eligible for funds under section 484 of
the Higher Education Act of 1965 (20 U.S.C.
1091); and
‘‘(6) is a citizen or national of the United
States or lawful permanent resident alien of the
United States.
‘‘(b) SPECIAL RULES FOR CERTAIN YOUTH PRO-
GRAMS.—An individual shall be considered to be a partici-
pant in a youth corps program described in section
122(a)(2) or a program described in section 122(a)(9)
that is carried out with assistance provided under section
121(a) if the individual—
‘‘(1) satisfies the requirements specified in sub-
section (a), except paragraph (4) of such subsection;
and
‘‘(2) is between the ages of 16 and 25, inclu-
sive, at the time the individual begins the term of
service.
‘‘SEC. 138. SELECTION OF NATIONAL SERVICE PARTICI-
PANTS.
‘‘(a) SELECTION PROCESS.—Subject to subsections
(b) and (c) and section 131(f), the actual recruitment and
selection of an individual to serve in a national service pro-
gram receiving assistance under section 121 or to fill an
approved national service position shall be conducted by
the State, subdivision of a State, Indian tribe, public or
private nonprofit organization, institution of higher edu-
cation, Federal agency, or other entity to which the assist-
ance and approved national service positions are provided.
‘‘(b) NONDISCRIMINATION AND NONPOLITICAL SE-
LECTION OF PARTICIPANTS.—The recruitment and selec-
tion of individuals to serve in national service programs
receiving assistance under section 121 or to fill approved
national service positions shall be consistent with the re-
quirements of section 175.
‘‘(c) SECOND TERM.—Acceptance into a national
service program to serve a second term of service under
section 139 shall only be available to individuals who per-
form satisfactorily in their first term of service.
‘‘(d) RECRUITMENT
AND PLACEMENT.—The Cor-
poration and each State Commission shall establish a sys-
tem to recruit individuals who desire to perform national
service and to assist the placement of these individuals in
approved national service positions, including positions
available under titles I and II of the Domestic Volunteer
Service Act of 1973 (42 U.S.C. 4951 et seq.). The Cor-
poration and State Commissions shall disseminate infor-
mation regarding available approved national service posi-
tions through cooperation with secondary schools, institu-
tions of higher education, employment service offices, vo-
cational rehabilitation agencies and other State offices
that serve primarily people with disabilities, and other ap-
propriate entities, particularly those organizations that
provide outreach to disadvantaged youths and youths with
disabilities.
‘‘(e) NATIONAL LEADERSHIP POOL.—
‘‘(1) SELECTION AND TRAINING.—From among
individuals recruited under subsection (d), the Cor-
poration may select individuals with significant lead-
ership potential, as determined by the Corporation,
to receive special training to enhance their leader-
ship ability. The leadership training shall be pro-
vided by the Corporation directly or through a grant
or contract.
‘‘(2) EMPHASIS ON CERTAIN INDIVIDUALS.—In
selecting individuals to receive leadership training
under this subsection, the Corporation shall make
special efforts to select individuals who have served
in the Peace Corps, as VISTA volunteers, as partici-
pants in a program under title II of the Domestic
Volunteer Service Act of 1973 (42 U.S.C. 5000 et
seq.), or as participants in national service programs
receiving assistance under section 121, or who are
honorably discharged members of the Armed Forces
of the United States.
‘‘(3) ASSIGNMENT.—At the request of a pro-
gram that receives assistance under the national
service laws, the Corporation may assign an individ-
ual who receives leadership training under para-
graph (1) to work with the program in a leadership
position and carry out assignments not otherwise
performed by regular participants. An individual as-
signed to a program shall be considered to be a par-
ticipant of the program.
‘‘(f) EVALUATION
OF SERVICE.—The Chairperson
shall issue regulations regarding the manner and criteria
by which the service of a participant shall be evaluated
to determine whether the service is satisfactory and suc-
cessful for purposes of eligibility for a second term of serv-
ice or a national service educational award.
‘‘SEC. 139. TERMS OF SERVICE.
‘‘(a) IN GENERAL.—As a condition of receiving a na-
tional service education award under subtitle D, a partici-
pant in an approved national service position shall be re-
quired to perform full- or part-time national service for
at least one term of service specified in subsection (b).
‘‘(b) TERM OF SERVICE.—
‘‘(1) FULL-TIME SERVICE.—An individual per-
forming full-time national service in an approved na-
tional service position shall agree to participate in
the program sponsoring the position for not less
than 1,700 hours during a period of not less than
9 months and not more than 1 year.
‘‘(2) PART-TIME SERVICE.—Except as provided
in paragraph (3), an individual performing part-time
national service in an approved national service posi-
tion shall agree to participate in the program spon-
soring the position for not less than 1,700 hours
during a period of—
‘‘(A) not less than 1 year and not more
than 2 years; or
‘‘(B) not less than 1 year and not more
than 3 years if the individual is enrolled in an
institute of higher education while preforming
all or a portion of the service.
‘‘(3) REDUCTION
IN
HOURS
OF
PART-TIME
SERVICE.—The Corporation may reduce the number
of hours required to be served to successfully com-
plete part-time national service to a level determined
by the Corporation, except that any reduction in the
required term of service shall include a correspond-
ing reduction in the amount of any national service
educational award that may be available under sub-
title D with regard to that service.
‘‘(c) RELEASE FROM COMPLETING TERM OF SERV-
ICE.—
‘‘(1) RELEASE
AUTHORIZED.—A recipient of
assistance under section 121 or a program sponsor-
ing an approved national service position may re-
lease a participant from completing a term of service
in the position—
‘‘(A) for compelling personal circumstances
as demonstrated by the participant; or
‘‘(B) for cause.
‘‘(2) EFFECT OF RELEASE FOR COMPELLING
CIRCUMSTANCES.—If a participant eligible for re-
lease under paragraph (1)(A) is serving in an ap-
proved national service position, the recipient of as-
sistance under section 121 or a program sponsoring
an approved national service position may elect—
‘‘(A) to grant such release and provide to
the participant that portion of the national
service educational award corresponding to the
portion of the term of service actually com-
pleted, as provided in section 147(b); or
‘‘(B) to permit the participant to tempo-
rarily suspend performance of the term of serv-
ice for a period of up to 2 years (and such addi-
tional period as the Corporation may allow for
extenuating circumstances) and, upon comple-
tion of such period, to allow return to the pro-
gram with which the individual was serving in
order to complete the remainder of the term of
service and obtain the entire national service
educational award.
‘‘(3) EFFECT OF RELEASE FOR CAUSE.—A par-
ticipant released for cause may not receive any por-
tion of the national service educational award.
‘‘SEC. 140. LIVING ALLOWANCES FOR NATIONAL SERVICE
PARTICIPANTS.
‘‘(a) PROVISION OF LIVING ALLOWANCE.—
‘‘(1) LIVING ALLOWANCE REQUIRED.—Subject
to paragraph (3), a national service program carried
out using assistance provided under section 121
shall provide to each participant who participates on
a full-time basis in the program a living allowance
in an amount equal or greater than the average an-
nual subsistence allowance provided to VISTA volun-
teers under section 105 of the Domestic Volunteer
Service Act of 1973 (42 U.S.C. 4955).
‘‘(2) LIMITATION
ON
FEDERAL
SHARE.—The
amount of the annual living allowance provided
under paragraph (1) that may be paid using assist-
ance provided under section 121 and using any other
Federal funds shall not exceed 85 percent of the
total average annual provided to VISTA volunteers
under section 105 of the Domestic Volunteer Service
Act of 1973 (42 U.S.C. 4955).
‘‘(3) MAXIMUM
LIVING
ALLOWANCE.—Except
as provided in subsection (c), the total amount of an
annual living allowance that may be provided to a
participant in a national service program shall not
exceed 200 percent of the average annual subsist-
ence allowance provided to VISTA volunteers under
section 105 of the Domestic Volunteer Service Act
of 1973 (42 U.S.C. 4955).
‘‘(4) PRORATION OF LIVING ALLOWANCE.—The
amount provided as a living allowance under this
subsection shall be prorated in the case of a partici-
pant who is authorized to serve a reduced term of
service under section 139(b)(3).
‘‘(5) WAIVER
OR
REDUCTION
OF
LIVING
AL-
LOWANCE.—The Corporation may waive or reduce
the requirement of paragraph (1) with respect to
such national service program if such program dem-
onstrates that—
‘‘(A) such requirement is inconsistent with
the objectives of the program; and
‘‘(B) the amount of the living allowance
that will be provided to each full-time partici-
pant is sufficient to meet the necessary costs of
living (including food, housing, and transpor-
tation) in the area in which the program is lo-
cated.
‘‘(6) EXEMPTION.—The requirement of para-
graph (1) shall not apply to any program which was
in existence on the date of enactment of the Na-
tional Service Trust Act of 1993.
‘‘(7) EVALUATION
OF
LIVING
ALLOWANCE.—
Not later than 2 years after the effective date of this
subsection, the Corporation shall arrange for an
independent evaluation to determine the levels of liv-
ing allowances paid in all programs under this sub-
title, individually, by State, and by region. Such
evaluation shall determine the effects that such liv-
ing allowances have had on the ability of individuals
to participate in such programs.
‘‘(b) COVERAGE OF CERTAIN EMPLOYMENT-RELAT-
ED TAXES.—To the extent a national service program that
receives assistance under section 121 is subject, with re-
spect to the participants in the program, to the taxes im-
posed on an employer under sections 3111 and 3301 of
the Internal Revenue Code of 1986 (26 U.S.C. 3111,
3301) and taxes imposed on an employer under a work-
men’s compensation act, the assistance provided to the
program under section 121 shall include an amount suffi-
cient to cover 85 percent of such taxes based upon the
lesser of—
‘‘(1) the total average annual subsistence allow-
ance provided to VISTA volunteers under section
105 of the Domestic Volunteer Service Act of 1973
(42 U.S.C. 4955); and
‘‘(2) the annual living allowance established by
the program.
‘‘(c) EXCEPTION FROM MAXIMUM LIVING ALLOW-
ANCE FOR CERTAIN ASSISTANCE.—A professional corps
program described in section 122(a)(8) that desires to
provide or arrange for a living allowance in excess of the
maximum allowance authorized in subsection (a)(3) may
still apply for such assistance, except that—
‘‘(1) any assistance provided to the applicant
under section 121 may not be used to pay for any
portion of the allowance;
‘‘(2) the applicant shall apply for such assist-
ance only by submitting an application to the Cor-
poration for assistance on a competitive basis; and
‘‘(3) the national service program must be oper-
ated directly by the applicant and must meet urgent,
unmet human, educational, environmental, or public
safety needs, as determined by the Corporation.
‘‘(d) HEALTH INSURANCE.—
‘‘(1) IN GENERAL.—A State or other recipient
of assistance under section 121 shall provide a basic
health care policy for each full-time participant in a
national service program carried out or supported
using the assistance if the participant is not other-
wise covered by a health care policy. Not more than
85 percent of the cost of a premium shall be pro-
vided by the Corporation, with the remaining cost
paid by the entity receiving assistance under section
121. The Corporation shall establish minimum
standards that all plans must meet in order to qual-
ify for payment under this part, any circumstances
in which an alternative health care policy may be
substituted for the basic health care policy, and
mechanisms to prohibit participants from dropping
existing coverage.
‘‘(2) OPTION.—A State or other recipient of as-
sistance under section 121 may elect to provide from
its own funds a health care policy for participants
that does not meet all of the standards established
ized need of a participant who is a qualified individual
with a disability.
‘‘(g) 
WAIVER
OF
LIMITATION
ON
FEDERAL
SHARE.—The Corporation may waive in whole or in part
the limitation on the Federal share specified in this section
with respect to a particular national service program in
any fiscal year if the Corporation determines that such
a waiver would be equitable due to a lack of available fi-
nancial resources at the local level.
‘‘SEC. 141. NATIONAL SERVICE EDUCATIONAL AWARDS.
‘‘(a) ELIGIBILITY GENERALLY.—A participant in a
national service program carried out using assistance pro-
vided to an applicant under section 121 shall be eligible
for the national service educational award described in
subtitle D if the participant—
‘‘(1) serves in an approved national service po-
sition; and
‘‘(2) satisfies the eligibility requirements speci-
fied in section 146 with respect to service in that ap-
proved national service position.
‘‘(b) SPECIAL RULE FOR VISTA VOLUNTEERS.—A
VISTA volunteer who serves in an approved national serv-
ice position shall be ineligible for a national service edu-
cational award if the VISTA volunteer accepts the stipend
authorized under section 105(a)(1) of the Domestic Volun-
teer Service Act of 1973 (42 U.S.C. 4955(a)(1).’’.
(c) TABLE OF CONTENTS.—Section 1(b) of the Na-
tional and Community Service Act of 1990 (Public Law
101–610; 104 Stat. 3127) is amended—
(1) by striking the items relating to subtitle C
of title I of such Act and inserting the following new
items:
‘‘Subtitle C—National Service Trust Program
‘‘PART I—INVESTMENT IN NATIONAL SERVICE
‘‘Sec. 121. Authority to provide assistance and approved national service posi-
tions.
‘‘Sec. 122. Types of national service programs eligible for program assistance.
‘‘Sec. 123. Types of national service positions eligible for approval for national
service educational awards.
‘‘Sec. 124. Types of program assistance.
‘‘Sec. 125. Training and technical assistance.
‘‘Sec. 126. Other special assistance.
‘‘PART II—APPLICATION AND APPROVAL PROCESS
‘‘Sec. 129. Provision of assistance and approved national service positions by
competitive and other means.
‘‘Sec. 130. Application for assistance and approved national service positions.
‘‘Sec. 131. National service program assistance requirements.
‘‘Sec. 132. Ineligible service categories.
‘‘Sec. 133. Consideration of applications.
‘‘Sec. 134. Evaluation of success of investment in national service.
‘‘PART III—NATIONAL SERVICE PARTICIPANTS
‘‘Sec. 137. Description of participants.
‘‘Sec. 138. Selection of national service participants.
‘‘Sec. 139. Terms of service.
‘‘Sec. 140. Living allowances for national service participants.
‘‘Sec. 141. National service educational awards.’’;
and
(2) by inserting after the item relating to sec-
tion 195O the following new items:
‘‘Subtitle I—American Conservation and Youth Corps
‘‘Sec. 199. Short title.
‘‘Sec. 199A. General authority.
‘‘Sec. 199B. Allocation of funds.
‘‘Sec. 199C. State application.
‘‘Sec. 199D. Focus of programs.
‘‘Sec. 199E. Related programs.
‘‘Sec. 199F. Public lands or Indian lands.
‘‘Sec. 199G. Training and education services.
‘‘Sec. 199H. Amount of award; matching requirement.
‘‘Sec. 199I. Preference for certain projects.
‘‘Sec. 199J. Age and citizenship criteria for enrollment.
‘‘Sec. 199K. Use of volunteers.
‘‘Sec. 199L. Post-service benefits.
‘‘Sec. 199M. Living allowance.
‘‘Sec. 199N. Joint programs.
‘‘Sec. 199O. Federal and State employee status.’’.
(d) LIVING ALLOWANCE UNDER SUBTITLE I.—Sec-
tion 199M(a) of the National and Community Service Act
of 1990 (former section 133(a) of such Act as redesig-
nated in subsection (a)(3) of this section) (42 U.S.C.
12553(a)) is amended by striking paragraphs (1) and (2)
and inserting the following new paragraphs:
‘‘(1) LIVING ALLOWANCE REQUIRED.—Subject
to paragraph (3), each participant in a full-time
youth corps program that receives assistance under
this subtitle shall receive a living allowance in an
amount equal or greater than the average annual
subsistence allowance provided to VISTA volunteers
under section 105 of the Domestic Volunteer Service
Act of 1973 (42 U.S.C. 4955).
‘‘(2) LIMITATION
ON
FEDERAL
SHARE.—The
amount of the annual living allowance provided
under paragraph (1) that may be paid using assist-
ance provided under this subtitle, section 121, and
any other Federal funds shall not exceed 85 percent
of the total average annual subsistence allowance
provided to VISTA volunteers under section 105 of
the Domestic Volunteer Service Act of 1973 (42
U.S.C. 4955).
‘‘(3) MAXIMUM LIVING ALLOWANCE.—The total
amount of an annual living allowance that may be
provided to a participant in a full-time youth corps
program that receives assistance under this subtitle
shall not exceed 200 percent of the average annual
subsistence allowance provided to VISTA volunteers
under section 105 of the Domestic Volunteer Service
Act of 1973 (42 U.S.C. 4955).
‘‘(4) WAIVER
OR
REDUCTION
OF
LIVING
AL-
LOWANCE.—The Corporation may waive or reduce
the requirement of paragraph (1) with respect to
such national service program if such program dem-
onstrates that—
‘‘(A) such requirement is inconsistent with
the objectives of the program; and
‘‘(B) the amount of the living allowance
that will be provided to each full-time partici-
pant is sufficient to meet the necessary costs of
living (including food, housing, and transpor-
tation) in the area in which the program is lo-
cated.
‘‘(5) EXEMPTION.—The requirement of para-
graph (1) shall not apply to any program which was
in existence on the date of enactment of the Na-
tional Service Trust Act of 1993.
‘‘(6) EVALUATION
OF
LIVING
ALLOWANCE.—
Not later than 2 years after the effective date of this
subsection, the Corporation shall arrange for an
independent evaluation to determine the levels of liv-
ing allowances paid in all programs under this sub-
title, individually, by State, and by region. Such
evaluation shall determine the effects that such liv-
ing allowances have had on the ability of individuals
to participate in such programs.’’.
(e) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) REFERENCES.—Subtitle I of title I of the
National and Community Service Act of 1990 (as so
redesignated by subsection (a)(1) of this section) is
amended by striking ‘‘Commission’’ each place it ap-
pears in sections 199A, 199B, 199C, 199D, 199F,
199H, 199I, 199M, and 199N (as redesignated in
subsection (a)(3) of this section) and inserting ‘‘Cor-
poration’’.
(2) GENERAL
AUTHORITY.—Section 199A of
such Act (as redesignated in subsection (a)(3) of
this section) (42 U.S.C. 12541) is amended—
(A) by striking ‘‘under section 102’’; and
(B) by striking ‘‘, to the Secretary of the
Interior, or to the Director of ACTION’’ and
inserting ‘‘or to the Secretary of the Interior’’.
(3) ALLOCATION.—Section 199B of such Act
(as redesignated in subsection (a)(3) of this section)
(42 U.S.C. 12542) is amended by striking ‘‘section
123’’ each place it appears and inserting ‘‘section
199C’’.
(4) STATE APPLICATION.—Section 199C(a) of
such Act (as redesignated in subsection (a)(3) of
this section) (42 U.S.C. 12543(a)) is amended by
striking ‘‘section 122(b)’’ and inserting ‘‘section
199B(b)’’.
(5) PUBLIC LANDS.—Section 199F(b) of such
Act (as redesignated in subsection (a)(3) of this sec-
tion) (42 U.S.C. 12546(b)) is amended by striking
‘‘section 123’’ and inserting ‘‘section 199C’’.
(6) PREFERENCE.—Section 199I(a) of such Act
(as redesignated in subsection (a)(3) of this section)
(42 U.S.C. 12549) is amended by striking ‘‘section
123’’ and inserting ‘‘section 199C’’.
SEC. 102. NATIONAL SERVICE TRUST AND PROVISION OF
NATIONAL SERVICE EDUCATIONAL AWARDS.
(a) ESTABLISHMENT
OF TRUST; PROVISION
OF
AWARDS.—Subtitle D of title I of the National and Com-
munity Service Act of 1990 (42 U.S.C. 12571 et seq.) is
amended to read as follows:
‘‘Subtitle 
D—National 
Service
Trust and Provision of National
Service Educational Awards
‘‘SEC. 145. ESTABLISHMENT OF THE NATIONAL SERVICE
TRUST.
‘‘(a) ESTABLISHMENT.—There is established in the
Treasury of the United States an account to be known
as the National Service Trust. The Trust shall consist
of—
‘‘(1) from the amounts appropriated to the Cor-
poration and made available to carry out this sub-
title pursuant to section 501(a)(2), such amounts as
the Corporation may designate to be available for
the payment of—
‘‘(A) national service educational awards;
and
‘‘(B) interest expenses pursuant to section
148(e);
‘‘(2) any amounts received by the Corporation
as gifts, bequests, devise, or otherwise pursuant to
section 196(a)(2); and
‘‘(3) the interest on, and proceeds from the sale
or redemption of, any obligations held by the Trust.
‘‘(b) INVESTMENT OF TRUST.—It shall be the duty
of the Secretary of the Treasury to invest in full the
amounts appropriated to the Trust. Except as otherwise
expressly provided in instruments concerning a gift, be-
quest, devise, or other donation and agreed to by the Cor-
poration, such investments may be made only in interest-
bearing obligations of the United States or in obligations
guaranteed as to both principal and interest by the United
States. For such purpose, such obligations may be ac-
quired (1) on original issue at the issue price, or (2) by
purchase of outstanding obligations at the marketplace.
Any obligation acquired by the Trust may be sold by the
Secretary at the market price.
‘‘(c) EXPENDITURES FROM TRUST.—Amounts in the
Trust shall be available for payments of national service
educational awards in accordance with section 148.
‘‘(d) REPORTS TO CONGRESS ON RECEIPTS AND EX-
PENDITURES.—Not later than March 1 of each year, the
Corporation shall submit a report to the Congress on the
financial status of the Trust during the preceding fiscal
year. Such report shall—
‘‘(1) specify the amount deposited to the Trust
from the most recent appropriation to the Corpora-
tion, the amount received by the Corporation as gifts
or bequest during the period covered by the report,
and any amounts obtained by the Trust pursuant to
subsection (a)(3);
‘‘(2) identify the number of individuals who are
currently performing service to qualify, or have
qualified, for national service educational awards;
‘‘(3) identify the number of individuals whose
ability to claim national service educational awards
during the period covered by the report—
‘‘(A) has been reduced pursuant to section
147(b); or
‘‘(B) has lapsed pursuant to section
146(d); and
‘‘(4) estimate the number of additional ap-
proved national service positions which the Corpora-
tion will be able to make available under subtitle C
on the basis of any accumulated surplus in the
Trust above the amount required to provide national
service educational awards to individuals identified
under paragraph (2), including any amounts avail-
able as a result of the circumstances referred to in
paragraph (3).
‘‘SEC. 146. INDIVIDUALS ELIGIBLE TO RECEIVE A NATIONAL
SERVICE EDUCATIONAL AWARD FROM THE
TRUST.
‘‘(a) ELIGIBLE INDIVIDUALS.—An individual shall
receive a national service educational award from the Na-
tional Service Trust if the individual—
‘‘(1) successfully completes the required term of
service described in subsection (b) in an approved
national service position;
‘‘(2) was 17 years of age or older at the time
the individual began serving in the approved na-
tional service position or was an out-of-school youth
serving in an approved national service position with
a youth corps program described in section
122(a)(2) or a program described in section
122(a)(9);
‘‘(3) has received a high school diploma, or the
equivalent of such diploma, at the time the individ-
ual uses the national service educational award, un-
less this requirement has been waived based on an
individual education assessment conducted by the
program; and
‘‘(4) is a citizen or national of the United
States or lawful permanent resident alien of the
United States.
‘‘(b) TERM OF SERVICE.—The term of service for an
approved national service position shall not be less than
the full- or part-time term of service specified in section
139(b).
‘‘(c) LIMITATION ON NUMBER OF TERMS OF SERV-
ICE FOR AWARDS.—Although an individual may serve
more than 2 terms of service described in subsection (b)
in an approved national service position, the individual
shall receive a national service educational award from the
National Service Trust only on the basis of the first and
second of such terms of service.
‘‘(d) TIME FOR USE OF EDUCATIONAL AWARD.—
‘‘(1) SEVEN-YEAR REQUIREMENT.—An individ-
ual eligible to receive a national service educational
award under this section may not use such award
after the end of the 7-year period beginning on the
date the individual completes the term of service in
an approved national service position that is the
basis of the award.
‘‘(2) EXCEPTION.—The Corporation may ex-
tend the period within which an individual may use
a national service educational award if the Corpora-
tion determines that the individual—
‘‘(A) was unavoidably prevented from
using the national service educational award
during the original 7-year period; or
‘‘(B) performed another term of service in
an approved national service position during
that period.
‘‘(e) SUSPENSION OF ELIGIBILITY FOR DRUG-RE-
LATED OFFENSES.—
‘‘(1) IN
GENERAL.—An individual who, after
qualifying under this section as an eligible individ-
ual, has been convicted under any Federal or State
law of the possession or sale of a controlled sub-
stance shall not be eligible to receive a national serv-
ice educational award during the period beginning
on the date of such conviction and ending after the
interval specified in the following table:
‘‘If convicted of:
The possession of a controlled substance:
Ineligibility period is:
1st conviction ................................................
1 year
2nd conviction ...............................................
2 years
3rd conviction ...............................................
indefinite
The sale of a controlled substance:
1st conviction ................................................
2 years
2nd conviction ...............................................
indefinite
‘‘(2) REHABILITATION.—An individual whose
eligibility has been suspended under paragraph (1)
shall resume eligibility before the end of the period
determined under such paragraph if the individual
satisfactorily completes a drug rehabilitation pro-
gram that complies with such criteria as the Cor-
poration shall prescribe for purposes of this para-
graph.
‘‘(3) FIRST CONVICTIONS.—An individual whose
eligibility has been suspended under paragraph (1)
and is convicted of his or her first offense may re-
sume eligibility before the end of the period deter-
mined under such paragraph if the student dem-
onstrates that he or she has enrolled or been accept-
ed for enrollment in a drug rehabilitation program
that complies with such criteria as the Corporation
shall prescribe for purposes of this subsection.
‘‘(4) DEFINITIONS.—As used in this subsection,
the term ‘controlled substance’ has the meaning
given in section 102(6) of the Controlled Substances
Act (21 U.S.C. 802(6)).
‘‘(5) EFFECTIVE DATE.—This subsection shall
be effective upon publication by the Corporation in
the Federal Register of criteria prescribed under
paragraph (2) of this subsection.
‘‘(f) AUTHORITY TO ESTABLISH DEMONSTRATION
PROGRAMS.—The Corporation may establish by regulation