SEC. 5. ADDITIONAL BUDGET AUTHORITIES FOR THE MOD-
ERNIZATION OF IT SYSTEMS. 
(a) ASSESSMENT OF CLOUD FIRST IMPLEMENTA-
TION.—Not later than 90 days after the date of the enact-
ment of this Act, the Director, in consultation with the 
Chief Information Officers Council, shall assess cloud 
computing opportunities and issue policies and guidelines 
for the adoption of Governmentwide programs providing 
for a standardized approach to security assessment and 
operational authorization for cloud computing products 
and services. 
(b) INFORMATION
TECHNOLOGY
SYSTEM
MOD-
ERNIZATION AND WORKING CAPITAL FUND.— 
(1) ESTABLISHMENT.—There is established in 
each covered agency an information technology sys-
tem modernization and working capital fund (here-
after ‘‘IT working capital fund’’) for necessary ex-
penses for the agency described in paragraph (2). 
(2) SOURCE OF FUNDS.—Amounts may be de-
posited into an IT working capital fund as follows: 
(A) Reprogramming of funds, including re-
programming of any funds available on the date 
of enactment of this Act for the operation and 
maintenance of legacy systems, in compliance 
with any applicable reprogramming law or 
guidelines of the Committees on Appropriations 
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of the House of Representatives and the Sen-
ate. 
(B) Transfer of funds, including transfer 
of any funds available on the date of enactment 
of this Act for the operation and maintenance 
of legacy systems, but only if transfer authority 
is specifically provided for by law. 
(C) Amounts made available through dis-
cretionary appropriations. 
(3) USE OF FUNDS.—An IT working capital 
fund established under paragraph (1) may be used 
only for the following: 
(A) The replacement of a legacy informa-
tion technology system. 
(B) The transition to cloud computing and 
innovative platforms and technologies subject to 
a transition plan for any project that costs 
more than $5,000,000 and approved by the 
Federal Chief Information Officer according to 
such guidelines as the Office of Management 
and Budget may designate. 
(C) To assist and support agency efforts to 
provide adequate, risk-based, and cost-effective 
information technology capabilities that address 
evolving threats to information security. 
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(D) Developmental, modernization, and en-
hancement activities of information technology. 
(4) EXISTING FUNDS.—An IT working capital 
fund may not be used to supplant funds provided for 
the operation and maintenance of any system al-
ready within an appropriation for the agency at the 
time of establishment of the IT working capital 
fund. 
(5) 
REPROGRAMMING
AND
TRANSFER
OF 
FUNDS.—The head of each covered agency shall 
prioritize funds within the IT working capital fund 
to be used initially for cost savings activities ap-
proved by the Federal Chief Information Officer, in 
consultation with the Chief Information Officer of 
the covered agency. The head of each covered agency 
may— 
(A) reprogram any amounts saved as a di-
rect result of such activities for deposit into the 
applicable IT working capital fund, consistent 
with paragraph (2)(A), except that any such re-
programming of amounts in excess of $500,000 
shall be reported to the Committees on Appro-
priations of the House of Representatives and 
the Senate 30 days ain advance of such re-
programming; and 
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(B) transfer any amounts saved as a direct 
result of such activities for deposit into the ap-
plicable IT working capital fund, consistent 
with paragraph (2)(B), except that any such 
transfer of amounts in excess of $500,000 shall 
be reported to the Committees on Appropria-
tions of the House of Representatives and the 
Senate 30 days in advance of such transfer. 
(6) RETURN OF FUNDS.—Any funds deposited 
into an IT working capital fund must be obligated 
no later than 3 years after the date of such deposit. 
Any funds that are unobligated 3 years after such 
date shall be rescinded and deposited into the gen-
eral fund of the Treasury and reported to the Com-
mittees on Appropriations of the House of Rep-
resentatives and the Senate. 
(7) SEMIANNUAL
REPORT
REQUIRED.—Not 
later than 6 months after the date of the enactment 
of this Act, and semiannually thereafter, the head of 
any covered agency that uses an IT working capital 
fund shall submit to the Committees on Appropria-
tions and Oversight and Government Reform of the 
House of Representatives and the Committees on 
Appropriations and Homeland Security and Govern-
mental Affairs of the Senate a report on the obliga-
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tion and expenditure of funds made available under 
this section. 
(c) GAO REPORT.—Not later than one year after the 
date of the enactment of this Act, and annually thereafter 
for five years, the Comptroller General of the United 
States shall submit to the Committees on Appropriations 
and Oversight and Government Reform of the House of 
Representatives and the Committees on Appropriations 
and Homeland Security and Governmental Affairs of the 
Senate a report— 
(1) on the implementation and operation of 
each IT working capital fund established under this 
section; 
(2) that identifies current practices and com-
pares the practices with industry best practices in 
areas such as the effective oversight and governance 
of a cloud computing working capital fund; and 
(3) that describes the basis for the use and op-
eration of an IT working capital fund, the efficacy 
of the working capital fund to accelerate technology 
transitions, and recommendations for further im-
provement for the working capital fund. 
SEC. 6. DEFINITIONS. 
In this Act: 
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