  In previous work, we discussed the detection of reverberation delays in the
NLS1 1H0707-495. The delays originate close to the black hole. Here, we show
that RE J1034+396 shows very similar lag properties. At low frequencies (< 1
\times 10-4 Hz), the time lag between energy bands increases with energy
separation, similar to that commonly seen in Galactic black holes and other
AGN. At higher frequencies (~ 3.5 \times 10-4 Hz), the soft (< 1 keV) and hard
(> 3 keV) bands lag behind the intermediate band (1-3 keV). The simplest
interpretation is that the intermediate band is dominated by the direct
power-law continuum, while the soft and hard bands are dominated by the
relativistically-smeared reflected emission. The low frequency delays are
present in both available observations. The high frequency lags are only seen
in one observation. In the observation where high frequency reverberation
delays are observed, the spectrum contains a power-law component and there is a
QPO in the light curve. In the other observation, no power-law component is
required and no QPO is seen. The lags originate a few gravitational radii from
the black hole, and the QPO is associated with the power-law emitting corona.
