SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Modernizing Govern-
ment Technology Act of 2017’’ or the ‘‘MGT Act’’. 
SEC. 2. FINDINGS; PURPOSES. 
(a) FINDINGS.—The Congress finds the following: 
(1) The Federal Government spends nearly 75 
percent of its annual information technology funding 
on operating and maintaining existing legacy infor-
mation technology systems. These systems can pose 
operational risks, including rising costs and inability 
to meet mission requirements. These systems also 
pose security risks, including the inability to use cur-
rent security best practices, such as data encryption 
and multi-factor authentication, making these sys-
tems particularly vulnerable to malicious cyber activ-
ity. 
(2) In 2015, the Government Accountability Of-
fice (GAO) designated Improving the Management 
of IT Acquisitions and Operations to its biannual 
High Risk List and identified as a particular con-
cern the increasing level of information technology 
spending on operations and maintenance, making 
less funding available for development or moderniza-
tion. The GAO also found the Government has spent 
billions on failed and poorly performing information
technology investments due to a lack of effective 
oversight. 
(3) The Federal Government must modernize 
Federal IT systems to mitigate existing operational 
and security risks. 
(4) The efficiencies, cost savings, and greater 
computing power offered by modernized solutions, 
such as cloud computing, have the potential to— 
(A) eliminate inappropriate duplication and 
reduce costs; 
(B) address the critical need for cybersecu-
rity by design; and 
(C) move the Federal Government into a 
broad, digital-services delivery model that will 
transform the ability of the Federal Govern-
ment to meet mission requirements and deliver 
services to the American people. 
(b) PURPOSES.—The purposes of this Act are the fol-
lowing: 
(1) Assist the Federal Government in modern-
izing Federal information technology to mitigate 
current operational and security risks. 
(2) Incentivize cost savings in Federal informa-
tion technology through modernization.
(3) Accelerate the acquisition and deployment 
of modernized information technology solutions, such 
as cloud computing, by addressing impediments in 
the areas of funding, development, and acquisition 
practices. 
SEC. 3. ESTABLISHMENT OF AGENCY INFORMATION TECH-
NOLOGY 
SYSTEMS 
MODERNIZATION 
AND 
WORKING CAPITAL FUNDS. 
(a) INFORMATION
TECHNOLOGY
SYSTEM
MOD-
ERNIZATION AND WORKING CAPITAL FUNDS.— 
(1) ESTABLISHMENT.—The head of a covered 
agency may establish within such agency an infor-
mation technology system modernization and work-
ing capital fund (in this section referred to as the 
‘‘IT working capital fund’’) for necessary expenses 
described in paragraph (3). 
(2) 
SOURCE
OF
FUNDS.—The 
following 
amounts may be deposited into an IT working cap-
ital fund: 
(A) Reprogramming and transfer of funds 
made available in appropriations Acts subse-
quent to the date of the enactment of this Act, 
including transfer of any funds for the oper-
ation and maintenance of legacy information 
technology systems, in compliance with any ap-
plicable reprogramming law or guidelines of the 
Committees on Appropriations of the House of 
Representatives and the Senate. 
(B) Amounts made available to the IT 
working capital fund through discretionary ap-
propriations made available subsequent to the 
date of the enactment of this Act. 
(3) USE OF FUNDS.—An IT working capital 
fund established under paragraph (1) may be used, 
subject to the availability of appropriations, only for 
the following: 
(A) To improve, retire, or replace existing 
information technology systems in the covered 
agency to enhance cybersecurity and to improve 
efficiency and effectiveness. 
(B) To transition legacy information tech-
nology systems at the covered agency to cloud 
computing and other innovative platforms and 
technologies, including those serving more than 
one covered agency with common requirements. 
(C) To assist and support covered agency 
efforts to provide adequate, risk-based, and 
cost-effective information technology capabilities 
that address evolving threats to information se-
curity.
(D) To reimburse funds transferred to the 
covered agency from the Technology Moderniza-
tion Fund established under section 4, with the 
approval of the Chief Information Officer of the 
covered agency. 
(4) EXISTING FUNDS.—An IT working capital 
fund may not be used to supplant funds provided for 
the operation and maintenance of any system within 
an appropriation for the covered agency at the time 
of establishment of the IT working capital fund. 
(5) PRIORITIZATION 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 approved by the Chief Information 
Officer of the covered agency, in consultation with 
the Administrator of the Office of Electronic Gov-
ernment. The head of each covered agency may re-
program and transfer any amounts saved as a direct 
result of such activities for deposit into the applica-
ble IT working capital fund, consistent with para-
graph (2)(A). 
(6) RETURN OF FUNDS.—Any funds deposited 
into an IT working capital fund shall be available 
for obligation for 3 years after the last day of the 
fiscal year in which such funds were deposited.
(7) AGENCY CIO RESPONSIBILITIES.—In evalu-
ating projects to be funded from the IT working 
capital fund, the Chief Information Officer of the 
covered agency shall consider, to the extent applica-
ble, guidance issued pursuant to section 4(a)(1) to 
evaluate applications for funding from the Tech-
nology Modernization Fund established under that 
section that include factors such as a strong busi-
ness case, technical design, procurement strategy 
(including adequate use of incremental software de-
velopment practices), and program management. 
(b) REPORTING REQUIREMENT.— 
(1) IN GENERAL.—Not later than 1 year after 
the date of the enactment of this Act, and every 6 
months thereafter, the head of each covered agency 
shall submit to the Director the following, with re-
spect to the IT working capital fund for the covered 
agency: 
(A) A list of each information technology 
investment funded with estimated cost and 
completion date for each such investment. 
(B) A summary by fiscal year of obliga-
tions, expenditures, and unused balances.