HR-2985-119
Ordered to be Reported (Amended) by the Yeas and Nays: 42 - 0.
Sponsored by Nancy Mace (R-SC)
What it does
This bill would amend the Technology Modernization Fund (TMF), a revolving fund that loans money to federal agencies to upgrade their information technology systems. It would tighten repayment requirements so agencies must reimburse the fund at levels sufficient to keep it operational through its 2032 sunset date, require funds to be released incrementally based on measurable project milestones, and add a mechanism to suspend or terminate funding for projects where agency heads made fraudulent or misleading statements in their applications. It would also create a new government-wide inventory of high-risk legacy IT systems, require agency Chief Information Officers to submit annual lists of such systems, and direct the Federal Chief Information Officer to compile and report a prioritized list of the ten riskiest legacy systems to Congress.
Who benefits
Federal employees who rely on outdated government IT systems that are slow, unreliable, or insecure. Members of the public who interact with federal agencies for services such as Social Security, veterans' benefits, tax filing, or immigration processing. Cybersecurity contractors and modern IT vendors who would compete for modernization contracts. Taxpayers broadly, if the tighter repayment and milestone requirements reduce waste on failed IT projects. Congressional oversight committees that would receive new, structured reporting on the riskiest legacy systems.
Who is hurt
Federal agencies with limited budgets that may struggle to meet stricter repayment terms, potentially making them less likely to apply for TMF funds. Agencies currently using TMF money for broader IT improvements beyond legacy system replacement, as the bill narrows allowable uses. IT vendors currently benefiting from loosely structured contracts that lack milestone-based accountability. Agency program managers whose projects could be terminated based on fraud findings, which may create a chilling effect on applications even for legitimate projects.
Supporters argue
Supporters argue that the federal government operates some of the oldest and most vulnerable IT infrastructure in the country — including systems running on COBOL code from the 1960s — and that the TMF has not consistently recovered its investments, threatening the fund's long-term viability. They contend that tying fund disbursements to measurable milestones and requiring full repayment mirrors best practices in both the private sector and successful federal IT programs, and that the new legacy system inventory will give Congress and agency leaders the visibility needed to prioritize the highest-risk systems before a catastrophic failure or breach occurs.
Opponents argue
Opponents argue that stricter repayment requirements will deter smaller or resource-constrained agencies — precisely those with the most outdated systems — from applying for TMF funds, since they cannot guarantee repayment from tight operating budgets. They contend that narrowing the fund's allowable uses to legacy system replacement removes flexibility for agencies to address emerging cybersecurity threats or efficiency improvements that don't fit neatly into that category, and that the fraud-based termination provision, while well-intentioned, could be applied inconsistently and chill legitimate applications from agencies uncertain about technical projections.