I 
115TH CONGRESS 
1ST SESSION 
H. R. 640 
To amend title I of the Patient Protection and Affordable Care Act to 
require that a State awarded a Federal grant to establish an Exchange 
and that terminates the State operation of such an Exchange provide 
for an audit of the use of grant funds and return funds to the Federal 
Government, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 24, 2017 
Mr. ALLEN (for himself, Mr. ROKITA, Mr. FARENTHOLD, Mr. PITTENGER, 
and Mr. ROE of Tennessee) introduced the following bill; which was re-
ferred to the Committee on Energy and Commerce 
A BILL 
To amend title I of the Patient Protection and Affordable 
Care Act to require that a State awarded a Federal 
grant to establish an Exchange and that terminates the 
State operation of such an Exchange provide for an 
audit of the use of grant funds and return funds to 
the Federal Government, 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 ‘‘Transparency and Ac-
countability of Failed Exchanges Act’’. 
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SEC. 2. STATES AWARDED EXCHANGE ESTABLISHMENT 
GRANTS 
THAT 
TERMINATE 
STATE 
OPER-
ATION OF SUCH AN EXCHANGE REQUIRED TO 
PROVIDE AUDITS OF THE USE OF GRANT 
FUNDS AND RETURN FUNDS TO THE FED-
ERAL GOVERNMENT. 
(a) IN GENERAL.—Section 1311(a) of the Patient 
Protection and Affordable Care Act (42 U.S.C. 18031(a)) 
is amended by adding at the end the following new para-
graph: 
‘‘(6) TREATMENT IN CASE OF EXCHANGE TER-
MINATION.— 
‘‘(A) IN GENERAL.—In the case of a State 
that is awarded a grant under this section to 
establish an Exchange and that terminates the 
operation of such Exchange or otherwise trans-
fers the operation of such Exchange to an enti-
ty other than such State— 
‘‘(i) not later than 30 days after the 
date of such termination or transfer (or, in 
the case of such a termination or transfer 
that occurred before the date of the enact-
ment of this paragraph, not later than 30 
days after such date of enactment), the 
State shall submit to Congress and the 
Secretary a report containing the results of 
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an audit of how amounts awarded to such 
State pursuant to such grant were used; 
and 
‘‘(ii) not later than 30 days after the 
date of such termination or transfer (or, in 
the case of such a termination or transfer 
that occurred before the date of the enact-
ment of this paragraph, not later than 30 
days after such date of enactment)— 
‘‘(I) in accordance with subpara-
graph (B), there are rescinded any 
unobligated amounts awarded to such 
State pursuant to such grant; and 
‘‘(II) in accordance with subpara-
graph (C), the State shall provide to 
the Administrator of General Services 
any property acquired by such State 
with amounts awarded to such State 
pursuant to such grant and shall sub-
mit to Congress and the Secretary a 
record of the provision of such prop-
erty to the Administrator. 
‘‘(B) RETENTION OF FUNDS FOR DEFICIT 
REDUCTION.—Funds rescinded under subpara-
graph (A)(ii)(I) shall be retained in the general 
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fund of the Treasury for Federal budget deficit 
reduction. 
‘‘(C) TREATMENT
OF
PROPERTY.—The 
Administrator of General Services may— 
‘‘(i) dispose of any property obtained 
pursuant 
to 
subparagraph 
(A)(ii)(II) 
through a public auction for cash and for 
not less than the fair market value of the 
property, as determined by the Adminis-
trator; 
‘‘(ii) provide to any Federal agency 
such property for official use by such agen-
cy; or 
‘‘(iii) lease or hire such property, and 
may insure such property. 
‘‘(D) EXEMPTION
FROM
CERTAIN
PROP-
ERTY DISPOSAL REQUIREMENTS.—Any disposal 
of property conducted under subparagraph 
(C)(i) shall not be subject to— 
‘‘(i) subchapter IV of chapter 5 of 
subtitle I of title 40, United States Code; 
‘‘(ii) sections 550 and 553 of title 40, 
United States Code; 
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‘‘(iii) section 501 of the McKinney- 
Vento Homeless Assistance Act (42 U.S.C. 
11411); 
‘‘(iv) any other provision of law au-
thorizing the no-cost conveyance of prop-
erty owned by the Federal Government; or 
‘‘(v) any congressional notification re-
quirement other than that in section 545 
of title 40, United States Code. 
‘‘(E) INCOME FROM PROPERTY.—The Ad-
ministrator shall deposit any income from the 
disposition, lease, or hire of the property ob-
tained pursuant to subparagraph (A)(ii)(II) in 
the general fund of the Treasury for Federal 
budget deficit reduction.’’. 
(b) APPLICATION OF THE FALSE CLAIMS ACT.—Sec-
tion 1313(a)(6)(A) of the Patient Protection and Afford-
able Care Act (42 U.S.C. 18033(a)(6)(A)) is amended by 
adding at the end the following: ‘‘Further, except as other-
wise provided for expressly under this Act, the False 
Claims Act preempts any State enforcement action of al-
leged fraud, waste, and abuse of funds issued pursuant 
to this Act. States that terminate or transfer their ex-
change will refer all current and future matters involving 
fraud, waste, and abuse of funds issued pursuant to this 
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Act to the United States Department of Justice. Any cur-
rent or future enforcement action shall be removed to or 
brought in Federal court. All fines, penalties, damages, 
or awards, monetary or otherwise, arising out of any cur-
rent or future enforcement action, represent Federal funds 
that shall be returned to the United States.’’. 
(c) ENFORCEMENT ACTION.—The Attorney General 
may bring an action before the appropriate district court 
of the United States to enforce section 1311(a)(6) of the 
Patient Protection and Affordable Care Act (42 U.S.C. 
18031(a)(6)). 
(d) EFFECTIVE DATE.—The provisions of this sec-
tion, including the amendment made by subsection (a), 
shall apply with respect to grants made before, on, or after 
the date of the enactment of this Act and to terminations 
and transfers of Exchanges occurring before, on, or after 
such date. 
Æ 
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