BILL ANALYSIS Ó
AB 1408
Page 1
Date of Hearing: May 12, 2015
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
AB 1408
(Hadley) - As Amended 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
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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.
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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:
a) 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.
b) Administering an oath or affirmation to one person and
executing the jurat, including the seal, ten dollars ($10).
c) 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.
d) Certifying a copy of a power of attorney under Section
4307 of the Probate, ten dollars ($10). (Government Code
Section 8211.)
1)Provides that no fees may be charged by notaries public for
the following services:
a) 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.)
b) Notarizing signatures on vote by mail ballot
identification envelopes or other voting materials.
(Government Code Section 8211(d).)
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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.
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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
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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
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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
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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
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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
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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