The USA Freedom Act is the House of Representatives' response to President Barack Obama's call for reforms to how the National Security Agency collects and keeps data on millions of Americans, a program divulged last year by contractor Edward Snowden.
In the original bill, the NSA no longer would have been allowed to use secret court orders to gather telephone data on unlimited millions of Americans, and collected data would be stored with telecom companies, not government groups like the NSA.
But the White House sought changes, particularly with the gathering of non-telephone data, setting off a series of furious negotiations that culminated in alterations that tech firms and rights groups found unpalatable.
"The latest draft opens up an unacceptable loophole that could enable the bulk collection of Internet users' data," the group said, calling on Congress to close the loophole to ensure meaningful reform.
The bill focuses on the NSA's ability under the Foreign Intelligence Surveillance Court to systematically collect call records in a bid to thwart terror.
But the reforms would only allow the NSA and Federal Bureau of Investigation to obtain records of people up to two "hops" from a suspect, and only after obtaining individual orders from the secret court based on a "reasonable articulable suspicion."
Conditions for scooping up non-telephone data, such as computer or credit card records, were also tightened, but to a lesser degree.
After intense closed-door talks between House leaders and administration officials, enough phraseology was modified to substantially alter the bill that passed unanimously through two committees on May 8.
The White House said Wednesday it fully supported the new version.
Debate centered on how the court orders may be used to obtain records linked to a "specific selection term."
Earlier drafts defined such selectors as "a person, account or entity," but the revised language adds words such as "device" or non-limiting phrasing that would allow agencies to track entire zip codes, for example.
"There's nothing in this bill that seems to prohibit the government from saying that they want all of the email records in Salt Lake City," Center for Democracy and Technology senior counsel Harley Geiger told AFP.
"The government has a track record of creatively exploiting ambiguity in the law, and unfortunately this new version of USA FREEDOM introduces ambiguity in a very critical area."