On September 23, 2001, about 1237 Pacific daylight time, a Hughes 369D, N268ST, made a hard landing at the Palomar Airport, Carlsbad. The helicopter was substantially damaged. Neither the certified flight instructor (CFI), who possessed an airline transport pilot certificate, nor the student pilot, who possessed a commercial pilot certificate, was injured. The helicopter was operated by Civic Helicopters, Inc., Carlsbad. Visual meteorological conditions prevailed during the instructional flight, and no flight plan was filed. The flight originated from Carlsbad about 1215. According to the CFI, the accident occurred while he was instructing his student in the performance of a forced landing. The specific maneuver involved a simulated engine failure at 500 feet above ground level followed by an autorotation to touchdown. During the autorotation, the student allowed the main rotor rpm to decay below 100 percent. The CFI additionally reported that he recognized the desired touchdown location was farther than their flight profile would allow, so he attempted to "stretch the glide distance" by using collective. The main rotor rpm decreased, and during the touchdown/landing sequence the main rotor blade impacted the tail boom. The student stated that he was acquiring refresher flight training provided by the CFI. During the flight, the CFI specified the requisite maneuver and indicated how it was to be performed. The CFI indicated to him that he "would also be on the controls" during the maneuver. According to the student, he thought that during the autorotation the helicopter was going to touchdown short of the designated landing spot, and he announced his intention to perform a power recovery. At this time, the CFI manipulated the controls to extend the glide distance, and a power recovery was not made. The student further stated that during touchdown, a thumping noise was heard. During the flight crew's subsequent damage assessment inspection, evidence of main rotor blade impact damage was noted. Also, the tail boom with its horizontal and vertical stabilizers had been bent 180 degrees downward. The airport manager reported that the accident occurred at 1237 hours.