I 
114TH CONGRESS 
2D SESSION 
H. R. 6004 
To modernize Government information technology, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 13, 2016 
Mr. HURD of Texas (for himself, Mr. CONNOLLY, Mr. CHAFFETZ, Mr. CUM-
MINGS, Ms. KELLY of Illinois, and Mr. TED LIEU of California) intro-
duced the following bill; which was referred to the Committee on Over-
sight and Government Reform, and in addition to the Committee on Ap-
propriations, for a period to be subsequently determined by the Speaker, 
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned 
A BILL 
To modernize Government information technology, and for 
other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Modernizing Govern-
ment Technology Act of 2016’’ or the ‘‘MGT Act’’. 
SEC. 2. FINDINGS; PURPOSES. 
(a) FINDINGS.—The Congress finds the following: 
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(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 IT invest-
ments due to a lack of effective oversight. 
(3) The Federal Government must modernize 
Federal IT systems to mitigate existing operational 
and security risks. 
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(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 cyber se-
curity by design; and 
(C) move the Federal Government into a 
broad, digital services delivery model that will 
transform the Federal Government’s ability 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-
ized Federal information technology to mitigate cur-
rent 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. 
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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.—There is established in 
each covered agency an information technology sys-
tem modernization and working capital fund (in this 
section referred to as the ‘‘IT working capital fund’’) 
for necessary expenses for the agency described in 
paragraph (3). 
(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 the enactment of this Act for the operation 
and maintenance of legacy information tech-
nology systems, in compliance with any applica-
ble reprogramming law or guidelines of the 
Committees on Appropriations of the House of 
Representatives and the Senate. 
(B) Transfer of funds, including transfer 
of any funds available on the date of the enact-
ment of this Act for the operation and mainte-
nance of legacy information technology systems, 
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but only if transfer authority is specifically pro-
vided 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) To improve, retire, or replace existing 
information technology systems to improve effi-
ciency and effectiveness. 
(B) To transition to cloud computing or to 
transition to information technology systems 
shared by multiple agencies. 
(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) Reimbursement of funds transferred 
from the Information Technology Modernization 
Fund established under section 4. 
(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 covered agency 
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at the time of establishment of the IT working cap-
ital 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 covered agency Chief Information Of-
ficer, in consultation with the Administrator of the 
Office of Electronic Government. 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); and 
(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). 
(6) RETURN OF FUNDS.—Any funds deposited 
into an IT working capital fund must be obligated 
not later than 3 years after the date of such deposit. 
Any funds that are unobligated 3 years after such 
date shall be rescinded and reported to the Commit-
tees on Appropriations of the House of Representa-
tives and the Senate. 
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(7) AGENCY CIO RESPONSIBILITIES.—In evalu-
ating projects to be funded from the IT working 
capital fund, the covered agency Chief Information 
Officer shall consider, to the extent applicable, guid-
ance established pursuant to section 4(a)(1) to 
evaluate applications for funding from the Informa-
tion Technology Modernization Fund that include 
factors such as a strong business case, technical de-
sign, procurement strategy (including adequate use 
of incremental software development practices), and 
program management. 
(b) REPORTING REQUIREMENT.— 
(1) IN
GENERAL.—Not later than one 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 respect to the IT working capital fund for that 
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 the obli-
gations, expenditures, and unused balances. 
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(2) PUBLIC AVAILABILITY.—The Director shall 
make the information required pursuant to para-
graph (1) publicly available on a website. 
(c) COVERED AGENCY DEFINED.—In this section, 
the term ‘‘covered agency’’ means each agency listed in 
section 901(b) of title 31, United States Code. 
SEC. 4. ESTABLISHMENT OF INFORMATION TECHNOLOGY 
MODERNIZATION FUND AND BOARD. 
(a) INFORMATION TECHNOLOGY MODERNIZATION 
FUND.— 
(1) ESTABLISHMENT.—There is established in 
the Treasury an Information Technology Moderniza-
tion Fund (in this section referred to as the 
‘‘Fund’’) for technology related activities, to improve 
information technology, to enhance cybersecurity 
across the Federal Government, and to be adminis-
tered in accordance with guidance established by the 
Director of the Office of Management of Budget. 
(2) ADMINISTRATION OF FUND.—The Adminis-
trator of General Services, in consultation with the 
Chief Information Officers Council and with the con-
currence of the Director, shall administer the Fund 
in accordance with this subsection. 
(3) USE
OF
FUNDS.—The Administrator of 
General Services shall, in accordance with the rec-
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ommendations of the Information Technology Mod-
ernization Board established under subsection (b), 
use amounts in the Fund for the following purposes: 
(A) To transfer such amounts, to remain 
available until expended, to the head of an 
agency to improve, retire, or replace existing in-
formation technology systems to enhance cyber-
security and improve efficiency and effective-
ness. 
(B) For the development, operation, and 
procurement of information technology prod-
ucts, services, and acquisition vehicles for use 
by agencies to improve Governmentwide effi-
ciency and cybersecurity in accordance with the 
requirements of the agencies. 
(C) To provide services or work performed 
in support of the activities described under sub-
paragraph (A) or (B). 
(4) CREDITS; AVAILABILITY OF FUNDS.— 
(A) CREDITS.—In addition to any funds 
otherwise appropriated, the Fund shall be cred-
ited with all reimbursements, advances, or re-
funds or recoveries relating to information tech-
nology or services provided through the Fund. 
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(B) AVAILABILITY
OF
FUNDS.—Amounts 
deposited, credited, or otherwise made available 
to the Fund shall be available until expended 
and without further appropriation for the pur-
poses described in paragraph (3). 
(5) REIMBURSEMENT.— 
(A) PAYMENT BY AGENCY.—For a product 
or service developed under paragraph (3), the 
head of an agency that uses such product or 
service shall pay an amount fixed by the Ad-
ministrator of General Services in accordance 
with this subsection. 
(B) REIMBURSEMENT
BY
AGENCY.—The 
head of an agency shall reimburse the Fund for 
any transfer made under paragraph (3)(A) in 
accordance with the terms established in the 
written agreement described in paragraph (6). 
Notwithstanding any other provision of law, an 
agency may make a reimbursement required by 
this subparagraph from any appropriation avail-
able for information technology activities. An 
obligation to make a payment under an agree-
ment described in paragraph (6) in a future fis-
cal year shall be recorded pursuant to section 
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1501 of title 31, United States Code, in the fis-
cal year in which the payment is due. 
(C) PRICES FIXED BY ADMINISTRATOR OF 
GENERAL
SERVICES.—The Administrator of 
General Services, in consultation with the Di-
rector, shall establish amounts to be paid by an 
agency and terms of repayment for use of a 
product or service developed under paragraph 
(3) at levels sufficient to ensure the solvency of 
the Fund, including operating expenses. Before 
making any changes to the established amounts 
and terms of repayment, the Administrator of 
General Services shall conduct a review and ob-
tain approval from the Director. 
(D) FAILURE
TO
MAKE
TIMELY
REIM-
BURSEMENT.—The Administrator of General 
Services may obtain reimbursement by the 
issuance of transfer and counterwarrants, or 
other lawful transfer documents, supported by 
itemized bills, if payment is not made by an 
agency— 
(i) within 90 days after the expiration 
of a repayment period described in the 
written agreement described in paragraph 
(6)(A); or 
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