Amends Federal provisions concerning State participation in the National Guard Challenge Program (a civilian youth opportunities program conducted by the Secretary of Defense) to: (1) provide a maximum Federal matching funds level of 65 percent of the costs of operating the State program during FY 2004, 70 percent during FY 2005, and 75 percent during FY 2006; and (2) authorize appropriations for the Program for FY 2004 and beyond.