Existing law authorizes 2 or more public agencies, by agreement, to form a joint powers authority to exercise any power common to the contracting parties, as specified.

This bill would make nonsubstantive changes to this provision.

Date of Hearing: May 12, 2015

ASSEMBLY COMMITTEE ON JUDICIARY

Mark Stone, Chair

ABPCA Bill Id:AB 1408

Author:(Hadley) – As Amended Ver:March 26, 2015

SUBJECT: NOTARIES PUBLIC: FEES

KEY ISSUE: SHOULD THE STATUTORY FEE CAP FOR NOTARY PUBLIC SERVICES BE ABOLISHED TO ALLOW NOTARIES PUBLIC TO CHARGE ANY FEE THEY CHOOSE FOR THE SERVICES THEY PROVIDE?

SYNOPSIS

This well-intentioned bill seeks to repeal the statutory limit on the amount that notaries public are allowed to charge for the services they provide to the public. Notaries public are commissioned for four-year terms by the Secretary of State. To receive a commission, an individual must be at least 18 years old, be a California resident, complete a study course, pass an examination, clear a background check, and pay a fee to the Secretary of State. Upon receiving a commission, a notary public may, among other things, certify, acknowledge, and witness signatures or documents. For the basic services that a notary public provides, there is a statutory cap on the fees that a notary public may charge. The author views the fee limits on the services that notaries public provide as an unnecessary restriction on the free market system of negotiating rates for services and believes these limits discourage competition and industry growth. This Committee has concerns about removing those fee caps because notaries public provide services that are mandated by law, meaning that notaries public function as quasi-governmental services. Notaries are similar to court reporters in that they provide services that only they are authorized and entrusted to perform and there is no other source for those same services. However, unlike court reporters, their services are required by law so the public must obtain their services in order to qualify for other important services and benefits. Vital services that notaries provide include notarizing guardianship papers, health care forms, school enrollment forms, child custody agreements, last wills and testaments, parental travel consent letters, and many other legal forms and statements. Without the affordable services that notaries provide, poor and elderly people would not be able to afford these vital services. This bill is supported by the National Notary Association. There is no known opposition to this bill.

SUMMARY: Removes the statutory fee limits set for specified notarial acts. Specifically, this bill removes the statutory fee limits on the following services that a notary public provides to the public:

1. Taking an acknowledgement or proof of deed or other instrument, including the seal and writing of a certificate.

2. Administering an oath or affirmation to one person and executing a jurat, including the seal. (A jurat is a statement on an affidavit of when, where, and before whom it was sworn.)

3. Providing services at a deposition, including administering the oath to a witness at a deposition, and providing the certificate to the deposition.

4. Certifying a power of attorney under Section 4307 of the Probate Code.

EXISTING LAW:

1. Provides that fees charged by a notary public for the following services shall not exceed the following:

1. Taking an acknowledgment or proof of a deed, or other instrument, to include the seal and the writing of the certificate, ten dollars ($10) for each signature taken.

2. Administering an oath or affirmation to one person and executing the jurat, including the seal, ten dollars ($10).

3. Providing services rendered to take a deposition, twenty dollars ($20), and in addition thereto, five dollars ($5) for administering the oath to the witness and five dollars ($5) for the certificate to the deposition.

4. Certifying a copy of a power of attorney under Section 4307 of the Probate, ten dollars ($10). (Government Code Section 8211.)

2. Provides that no fees may be charged by notaries public for the following services:

1. Notarizing an application or a claim by a United States military veteran for a pension, allotment, allowance, compensation, insurance, or any other veteran’s benefit. (Government Code Section 6107.)

2. Notarizing signatures on vote by mail ballot identification envelopes or other voting materials. (Government Code Section 8211(d).)

FISCAL EFFECT: As currently in print this bill is keyed non-fiscal.

COMMENTS: This bill seeks to abolish the statutory limits on fees that can by charged by notaries public for notarial services and to authorize notaries public to establish their own fees for their services. According to the author, this bill is needed because, “Notary Publics are small businessmen and women who provide an essential service. It is not the job of our state government to set prices in competitive markets. Notary Publics and their customers should be free to set the terms on which they do business.”

Author’s statement. In support of the bill, the author states:

In California, the initial total cost to become a licensed Notary Public adds up to about $450 – this includes a $40 filing fee, about $100 for a live scan fingerprint, seals, a color passport photo, an education course that must be taken every four years, etc. The legislature has imposed mandatory costs that small businesses and individual Notaries must pay in order to comply with existing law. However, the legislature also caps the maximum fee that a Notary Public may charge at $10 per signature – and this cap has not changed for more than 20 years. In 1993, AB 1090 doubled the maximum fee allowed that a Notary Public may charge per signature, increasing from $5 to $10 – prior to that, the fee hadn’t been touched since 1984. Meanwhile, minimum wage has gone from $3.35 in 1984 to $4.25 in 1993 and to $10 in 2016 to reflect inflation, cost of living, etc.

Waiving this fee cap is not only warranted, but necessary. Very few industries, if any other, are restricted by statue in this manner; fees that licensed professionals in other industries – from lawyers to hair stylists – may charge are not dictated by law, and the Notary industry in California should be the same. By allowing the free market to determine the going rate (including the possibility of higher and even lower premiums in certain circumstances as determined by the business provider and client), California will encourage competition and industry growth. Notaries Public and their customers should be free to determine what a reasonable fee is for doing business, as other business people and industries already do in California.

Notaries Public and the Services they Provide to Californians. According to the California Secretary of State website, notaries are commissioned by the Secretary of State as public officials who perform valuable services to the legal, business, financial and real estate communities. Their services include certifying or witnessing signatures on official documents. Specifically, notaries in California may, among other things, administer oaths and affirmations and perform civil marriage ceremonies. (www.sos.ca.gov/notary) According to the National Notary Association’s website, “A notarial appointment is a privilege, not a right. A notary may perform notarial acts only while his or her commission is current. (www.asnnotary.org) Notary public commissions are issued for four-year terms in California.

The State’s Interest in Notarial Services. Notaries are granted special privileges to provide services to the public at large. Many important documents that affect families, seniors and children require notarization and notaries are the single source for providing these types of services. Guardianship documents, child custody agreements, adoption documents, wills and trusts, advanced healthcare directives, power of attorney, and quit claim deeds all require notarization in order to be legally sufficient. Notaries also help to prevent fraud. They are required to verify that the person signing the document has sufficient identification to prove that they are who they purport to be. The state has an interest in ensuring that vital services are affordable to all who need to utilize them. The role of a notary public is voluntary, no one is forced to perform this public service but those who make this choice are required to abide by certain statutory rules and governmental regulations in order to maintain the status quo.

Not all Notary Fees are Set by Statute. Most services that a notary public performs for the general public have a fee that is capped by statute, as provided in Government Code Section 8211. These services are limited by statute:

(1) Taking an acknowledgment or proof of a deed, or other instrument, to include the seal and the writing of the certificate, ten dollars ($10) for each signature taken.

(2) Administering an oath or affirmation to one person and executing the jurat, including the seal, ten dollars ($10).

(3) Taking any deposition, twenty dollars ($20), and in addition thereto, five dollars ($5) for administering the oath to the witness and five dollars ($5) for the certificate to the deposition.

(4) Certifying a copy of a power of attorney under Section 4307 of the Probate ten dollars ($10).

The law prohibits a notary public from charging any fee for performing these services:

(1) To notarize signatures on vote by mail ballot identification envelopes or other voting materials.

(2) To notarize an application or a claim by a United States military veteran for a pension, allotment, allowance, compensation, insurance, or any other veteran’s benefit under Government Code Section 6107.

There are other services that a notary public provides, such as for an employer or by contract agreement. These services may include real estate closings for titles companies and banks. There are no fee limits on these services. Therefore, notaries public are free to charge what the market will bear for their services.

Committee Concerns. This Committee has concerns about the provisions of this bill that would authorize unrestricted rates for the services that notaries provide to the public for the services outlined in Government Code Section 8211. Current law requires various documents to be notarized. Notaries are similar to court reporters in that they are quasi-governmental employees, who provide professional services that only they are authorized and qualified to perform and for which there is no other source for that same service. In order to maintain access to the courts, it is appropriate to regulate the fees that a court reporter may charge when providing services to the courts. Otherwise, only those who are more affluent would be able to afford to pay the rates that an unregulated court reporter could charge. So justice would grant an advantage to the person with the most resources, while allowing those with limited resources to suffer because they cannot afford to pay market rates for necessary items like transcripts and other records of court proceedings. The same is true for services of a notary public. Vital services that notaries provide include notarizing guardianship papers, health care forms, school enrollment forms, child custody agreements, last will and testament, parental travel consent letters, and many others. Without requiring that these services remain affordable for all, poor and elderly people would be forced to forgo important events in their lives because they were unable to afford these vital services.

The Committee finds the author’s statements untenable. The author states, “Very few industries, if any other, are restricted by statue in this manner; fees that licensed professionals in other industries – from lawyers to hair stylists – may charge are not dictated by law, and the Notary industry in California should be the same.” While it is true that private lawyers are free to set their rates, in situations where a person’s life or liberty is at stake (i.e. in a criminal case), the government provides the legal counsel to indigent persons at no charge. The costs of legal services provided by attorneys appointed to represent indigent persons are statutorily set and for those who are without any means to pay, their services are free.

It is inappropriate to compare a hair stylist to a notary public in terms of their freedom to set their own rates. A hair stylist or other small business person is free to set his or her own rates because the services that they provide are not required by law and there are many options available to consumers: from highly trained beauticians to newly licensed hair cutters at chain outlets. Small businesses are independent entities and may negotiate within the free market system because government has a vested interest in seeing that small businesses thrive, employ people and contribute positively to our local economies. However, most small businesses do not provide vital, specified governmental services that people are required to use and cannot live without.

This Committee understands the author’s well-intentioned goal to increase the income of persons who supply a vital community service. And that intent is admirable. However, it is in the interest of the public that the state sets restrictions or limits on some of the services provided by notaries public, specifically those which the public most often must utilize. A notary public may engage in other business opportunities and may provide additional services, with the freedom to set their rates for those services. There are signing notaries, who contract with title and mortgage companies to provide services at negotiated rates which far exceed the limits that the state imposes, and also notaries who officiate weddings and charge additional fees for services performed that exceed the simple signing of the marriage license. Additional services that notaries public provide to increase their coffers include mail box rentals, shipping and mailing services, real estate, and banking. However, for the basic services that notaries provide and which the public must utilize, the state has the authority and a duty to continue regulating those fees to keep them affordable and accessible to all.

ARGUMENTS IN SUPPORT: The National Notary Association writes in support:

The requirements to become a Notary Public in California have expanded over the past few years and increased the cost to become a Notary. Every four years, Notaries or their employers must pay for the following: LiveScan fingerprints and a background check, color passport photograph, course of instruction, surety bond, official seal, journal of official acts, application fee and fees to file the bond and oath of office in the county of the applicant’s principal place of business. The costs of these requirements vary, but can exceed $400.

These regulatory-imposed costs do not take into account that claims involving Notary bonds in California are the highest in the nation. For this reason, many Notaries purchase optional errors and omissions insurance policies at additional cost to protect them from liability. With an insurance policy, the costs to be a Notary can run $500 to over $800.

REGISTERED SUPPORT / OPPOSITION:

Support

National Notary Association

Opposition

None on file

Analysis Prepared by: Khadijah Hargett / JUD. / (916) 319-2334