Dec 29, 2015 3 min read

When state lawmakers passed Act 13 in 2012 to regulate unconventional natural gas drilling, they wanted to put one agency in charge of overseeing both the local zoning rules and disbursement of the new impact fees the industry pays to communities where well pads are developed.

The state Public Utility Commission was an obvious choice considering its history of regulating various utilities in Pennsylvania. So the agency was put in charge to ensure Marcellus Shale drillers were following the law.

But the law was controversial from the beginning because it took zoning power away from local officials and instead gave the authority to the state. Several area communities challenged that provision of the law and Commonwealth Court ruled the state zoning rules were unconstitutional.

That left the PUC in charge of collecting and distributing the fees, but no enforcement power to ensure the money was being appropriately spent

An investigative series by the Observer-Reporter staff this month revealed communities across the state have not reported nearly $30 million in impact fees in the first three years of the program. Moreover, Act 13 offers no penalties against communities that do no report as required.

In essence, the state is requiring communities to report how they spend the money, but the law does not compel them to do just that.

It should be noted that the cases in which impact fee money has not been properly reported to the PUC does not mean local officials are misusing the money. In fact, several communities in Washington and Greene counties that made the “unaccounted list” are adamant they indeed reported the spending figures.

But there should be more accountability when an amount of money that large – $852 million in impact fees over four years – is being handed out.

And it seems two local lawmakers and the state auditor general are taking notice. Rep. Brandon Neuman, D-North Strabane, and Rep. Peter Daley, D-California, said it might be time to revisit Act 13 to offer more teeth to the law or even change the agency that oversees it.

“If we do not have a mechanism in there for enforcement, we have to have accountability,” Daley said.

Neuman went a step further and suggested it could be time to hand oversight to the state Department of Community and Economic Development, which is more accustomed to handling community grants.

“Maybe the PUC is not the proper place for oversight,” Neuman said. “Maybe it’s the DCED or another agency that is used to looking at the fees.”

That’s exactly what should happen.

There should also be more independent oversight on how communities spend the money. State Auditor General Eugene DePasquale said the situation is “on our radar” and he expects to perform spot audits on the impact fees sooner rather than later.

“We’ve gotten feedback from a bunch of different areas, but no one (municipality) in particular,” DePasquale said. “Act 13 is one that tends to pop up a lot. It’s mostly a concern for the lack of transparency (on spending). It’s not always transparent.”

DePasquale should be applauded for recognizing the issue and beginning the process of periodic audits now that the impact fees are entering their fifth year of existence and a paper trail (or lack thereof) is in place.

But it’s time for the Legislature to revisit Act 13 and put in place proper safeguards to ensure the impact fee money is being spent properly, reported accurately and audited on a regular basis.

There’s just too much money at stake to do nothing.