American Youth Hostel Act - Authorizes the Secretary of the Interior, through the Director of the Bureau of Outdoor Recreation, to make grants to States, local governments, and private nonprofit institutions to defray 75 percent of the cost of renovating structures for use as youth hostels.

Requires each grant applicant to: (1) assure that its equity in the structure to be renovated plus funds to be placed in escrow equal at least 25 percent of renovation costs; (2) submit a renovation plan; (3) indicate that it intends to operate the hostel or assure that upon completion of renovation that it will transfer title to the structure to American Youth Hostel, Inc., free of all encumbrances; (4) conform to regulations to be adopted by the Director relative to hostel supervision and renovation; and (5) comply with other specified provisions.

Requires that a public hearing be held with respect to each application for a renovation grant under this Act.