New legislation introduced in the U.S. House of Representatives would authorize $500 million annually from fiscal years 2027 through 2030 – totaling $1 billion in funding over four years – for a new federal grant program aimed at helping state and local governments modernize aging technology systems and strengthen cybersecurity.
The State and Local Public Sector Innovation Act, filed on May 20 by Rep. Valerie Foushee, D-N.C., would task the Department of Commerce with creating the new grant program. It would be subject to future congressional appropriations to fund the program.
According to a press release from Rep. Foushee’s office, the legislation aims to help state and local governments upgrade technology infrastructure and improve public service delivery at a time when many jurisdictions are struggling to keep pace with rapid technological change.
“Modernizing public institutions and utilizing technology to improve the administration of public services is a necessity in today’s growing digital age,” Foushee said.
“While technology continues to advance at a rapid rate, state and local governments are too often left behind without the proper infrastructure and training to keep up,” the congresswoman said.
Foushee said many governments lack the resources needed to implement modern technologies that could improve operations and public-facing services.
“I’m proud to introduce the State and Local Public Sector Innovation Act to ensure our federal government is providing proper support to state and local governments seeking to modernize their technology infrastructure,” Foushee said.
According to the text of the bill, the legislation would direct the assistant secretary of commerce for communications and information to establish a State and Local Government Technology Modernization Grant Program within one year of enactment.
Under the legislation, the assistant secretary would distribute grant funding among states each fiscal year using a two-part formula.
Half of the available funding would be distributed based on state population, while the other half would be allocated according to each state’s technology modernization needs as determined by the assistant secretary.
The bill would require that 70% of grant funding provided to a state be distributed to local governments within that state’s jurisdiction.
According to both the bill text and Foushee’s office, grant funding could be used for a broad range of modernization projects.
Eligible activities would include purchasing or upgrading technology and related infrastructure, including systems related to artificial intelligence technologies.
States and local governments also could use grant money to conduct technology assessments and testing designed to identify modernization needs.
The legislation also would allow funding to support updates to permitting processes intended to facilitate modernization efforts. It would also authorize the use of funds to establish or improve cybersecurity systems and processes designed to protect government operations and data.
In addition, grant recipients could use funding to hire and retain staff needed to support modernization efforts and provide workforce training related to technology upgrades.
The legislation also would permit the assistant secretary of Commerce to allocate a portion of program funding toward regulatory enforcement activities, according to Foushee’s office.
“These proposed investments would protect critical infrastructure and individual privacy, optimize state resources, and ensure local governments can provide a meaningful digital experience,” said Nate Denny, who is North Carolina Department of Information Technology secretary and the state’s chief information officer.
The legislation also has received backing from the National Association of Counties, according to Rep. Foushee’s office.
