Schwarzenegger and Apple's CEO Steve Jobs have become powerful advocates for organ donations.
"When you sign up as a donor you are armed with the power of saving up to eight lives," Schwarzenegger said.
Jobs is living proof of that since he received a liver transplant last year.
"As a transplant recipient, I know how precious this gift of life is," he said.
California will now have a living donor registry for kidney transplants, and anyone can sign up to donate one of their two kidneys and still live an active life. Also, private employers must now allow workers to take paid time off to make a bone marrow or organ donation.
"It provides employers to give five days if someone wants to donate a bone marrow and up to 30 days for a transplant," St. Sen. Mark Desaulnier, D-Concord, said.
Desaulnier says knowing that one can still get paid serves as an incentive for people to sign up.
Megan Williams lost her daughter Michelle because she couldn't find a match within the Asian-American community.
"She was diagnosed with leukemia and the Vietnamese people don't know much about it," she said.
According to the U.S. Department of Health and Human Services, 6.3 percent of the candidates on the waiting list for transplants are Asian-American, but in 2009 they made up only 3 percent of organ donations.
Ten-year-old Luke Do was fortunate, since he found a match within that community.
"He was the only close match for my son and without him donating some stem cells my son would not be here today," Luke's dad Lam Do said.
The other piece of legislation signed into law states that patients on Medi-Cal will continue to get anti-rejection medication for up to two years after a transplant.
The legislation gives Californians a choice between signing up to be an organ donor right away through the Department of Motor Vehicles, or by checking a box on the form, a person may decide to do it later.