republic-os/legislation/us/states/ca/20192020/sb-540.md

---
type: "Bill"
title: "Nonprofit public benefit corporations."
description: "Existing law prohibits a nonprofit public benefit corporation from lending money or property to a director or officer, or guaranteeing the obligation of a director or officer, without the approval of the Attorney General. However, a nonprofit public benefit corporation is authorized to pay life insurance premiums for insurance on the life of a director or officer if repayment is secured by the proceeds of the policy and its cash surrender value."
jurisdiction: "us/states/ca"
legislature: "California Legislature"
session: "20192020"
identifier: "SB 540"
citation: "California SB 540 (20192020)"
classification: ["bill"]
subjects: ["Nonprofit public benefit corporations."]
status: "enacted"
primary_sponsors: ["Jones"]
version_count: 6
action_count: 25
vote_count: 6
first_action: "2019-02-21"
last_action: "2019-09-05"
source: "openstates"
source_identifier: "ocd-bill/ff8b68f1-0db9-4fe4-a443-8d7127b36fab"
source_url: "http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200SB540"
source_hash: "8027afeb90aebdef5fadede5405d949d31165d7a883d4b78272f41a15992442a"
vintage: "2026-07-01"
source_snapshot: "https://data.openstates.org/daily/2026-07-01/public.pgdump"
retrieved_at: "2026-07-06"
confidence: "reported"
tags: ["legislation", "bill", "us-ca"]
---

# California SB 540 (20192020) — Nonprofit public benefit corporations.

Existing law prohibits a nonprofit public benefit corporation from lending money or property to a director or officer, or guaranteeing the obligation of a director or officer, without the approval of the Attorney General. However, a nonprofit public benefit corporation is authorized to pay life insurance premiums for insurance on the life of a director or officer if repayment is secured by the proceeds of the policy and its cash surrender value.

## Version chain

The bill's text revisions, in order — the diff chain from filing to enrollment.

1. **02/21/19 - Introduced** (filed) — [source](https://leginfo.legislature.ca.gov/faces/billPdf.xhtml?bill_id=201920200SB540&version=20190SB54099INT)
2. **04/11/19 - Amended Senate** (committee substitute) — [source](https://leginfo.legislature.ca.gov/faces/billPdf.xhtml?bill_id=201920200SB540&version=20190SB54098AMD)
3. **04/30/19 - Amended Senate** (committee substitute) — [source](https://leginfo.legislature.ca.gov/faces/billPdf.xhtml?bill_id=201920200SB540&version=20190SB54097AMD)
4. **09/05/19 - Chaptered** (committee substitute) — [source](https://leginfo.legislature.ca.gov/faces/billPdf.xhtml?bill_id=201920200SB540&version=20190SB54095CHP)
5. **SB540** (committee substitute) — [source](http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200SB540)
6. **08/23/19 - Enrolled** (enrolled) — [source](https://leginfo.legislature.ca.gov/faces/billPdf.xhtml?bill_id=201920200SB540&version=20190SB54096ENR)

## Votes

- Do pass as amended, but first amend, and re-refer to the Committee on [Banking and Financial Institutions] — **12–0** (pass) · upper
- SB 540 Jones Senate Third Reading By Cooley — **68–3** (pass) · lower
- Do pass. To Consent Calendar. — **14–0** (pass) · lower
- Do pass and be re-referred to the Committee on [Insurance] with recommendation: To Consent Calendar — **10–0** (pass) · lower
- Do pass as amended — **6–0** (pass) · upper
- 3rd Reading — **31–4** (pass) · upper

## Sponsors

- Jones — primary (person)

## Timeline

The legislative action history — every referral, reading, and vote.

- **2019-02-21** Introduced. Read first time. To Com. on RLS. for assignment. To print. `introduction, reading-1`
- **2019-02-22** From printer. May be acted upon on or after March 24.
- **2019-03-07** Referred to Coms. on INS. and B. & F.I. `referral-committee`
- **2019-03-28** Set for hearing April 10.
- **2019-04-10** From committee: Do pass as amended and re-refer to Com. on B. & F.I. (Ayes 12. Noes 0. Page 652.) (April 10). `committee-passage-favorable, committee-passage, amendment-passage`
- **2019-04-11** Read second time and amended. Re-referred to Com. on B. & F.I. `reading-1, reading-2, amendment-passage, referral-committee`
- **2019-04-18** Set for hearing April 24.
- **2019-04-29** From committee: Do pass as amended. (Ayes 6. Noes 0. Page 872.) (April 24). `committee-passage-favorable, committee-passage, amendment-passage`
- **2019-04-30** Read second time and amended. Ordered to third reading. `amendment-passage, reading-1, reading-2`
- **2019-05-06** Read third time. Passed. (Ayes 31. Noes 4. Page 962.) Ordered to the Assembly. `passage, reading-3, reading-1`
- **2019-05-07** In Assembly. Read first time. Held at Desk. `reading-1`
- **2019-05-16** Referred to Coms. on B. & F. and INS. `referral-committee`
- **2019-06-05** June 10 hearing postponed by committee.
- **2019-06-24** June 24 set for first hearing canceled at the request of author.
- **2019-07-01** Assembly Rule 56 suspended.
- **2019-07-09** From committee: Do pass and re-refer to Com. on INS. with recommendation: To consent calendar. (Ayes 10. Noes 0.) (July 8). Re-referred to Com. on INS. `committee-passage-favorable, committee-passage, referral-committee`
- **2019-07-10** From committee: Do pass. Ordered to consent calendar. (Ayes 14. Noes 0.) (July 10). `committee-passage-favorable, committee-passage`
- **2019-07-11** Read second time. Ordered to consent calendar. `reading-1, reading-2`
- **2019-08-12** From consent calendar on motion of Assembly Member Calderon.
- **2019-08-12** Ordered to third reading.
- **2019-08-22** Read third time. Passed. (Ayes 68. Noes 3. Page 2803.) Ordered to the Senate. `passage, reading-3, reading-1`
- **2019-08-22** In Senate. Ordered to engrossing and enrolling.
- **2019-08-27** Enrolled and presented to the Governor at 3 p.m.
- **2019-09-05** Approved by the Governor. `executive-signature`
- **2019-09-05** Chaptered by Secretary of State. Chapter 250, Statutes of 2019.

## Source

OpenStates / OpenCivicData bulk snapshot [2026-07-01](https://data.openstates.org/daily/2026-07-01/public.pgdump); origin `ocd-bill/ff8b68f1-0db9-4fe4-a443-8d7127b36fab`. Confidence: reported (aggregated from official California legislature records).