California Gov. Gavin Newsom has signed a package of waste and recycling bills that rewrites the labor terms of municipal hauling franchises, tightens the state's carpet stewardship program, caps bottle-bill processing fees for bag-in-box containers and extends a food donation tax credit.

The most contentious measure, union-backed SB 1371, takes effect Jan. 1, 2027. From that date, no California city or county may enter into or amend a solid waste hauling agreement if a labor dispute would excuse the hauler from performing its duties. The law also voids existing force majeure provisions in such contracts where the clause is designed to cover a work stoppage caused by a strike.

Force majeure clauses traditionally cover "acts of God" — extreme weather events and comparable disruptions that prevent service delivery. An August Senate floor analysis framed the bill's intent plainly: "lawful labor disputes are not 'acts of God' and should not automatically relieve companies of their contractual obligations to provide essential services."

Teamsters California and the California Federation of Labor Unions AFL-CIO sponsored the bill, arguing it holds haulers accountable for service delivery and wage obligations rather than shifting costs onto municipalities. The AFL-CIO characterized the use of force majeure during strikes as an "abusive tactic."

"Waste workers have one of the toughest jobs in America. Their work is made even harder by greedy employers trying to take money out of their pockets," said Victor Mineros, co-chair of Teamsters California and director of the Teamsters Solid Waste and Recycling Division, in a statement.

The state's largest haulers lined up against the measure in August. WM, Recology, Republic Services, Waste Connections and the Resource Recovery Coalition of California all opposed SB 1371, arguing it offers insufficient operational flexibility and would raise costs for local agencies and ratepayers. Several chambers of commerce warned the bill could degrade service reliability and encourage illegal dumping.

The industry's opposition has precedent at the governor's desk. The legislature passed a version of the bill in 2023, and Newsom vetoed it, reasoning that local jurisdictions already had authority to negotiate contract amendments. Waste groups opposed that version as well.

The backdrop matters. During a 2021 Republic Services strike in Chula Vista, force majeure protections halted some collection service for roughly a month and shielded the company from liability, according to the bill analysis.

Carpet stewardship overhaul

AB 904 rewrites several parameters of California's carpet stewardship program. Starting in 2028, convention carpet must contain at least 5% post-consumer recycled content, and at least 20% of all convention carpet content must be reused.

A tighter collection mandate follows: from Jan. 1, 2029, all carpet removed from a residence or business must be collected for recycling and transported to a recycling facility by the producer responsibility organization. The PRO must also operate free drop-off locations for postconsumer carpet.

Rugs are excluded from the carpet program because they fall under the state's textile EPR law passed in 2024, according to an email from Carpet America Recovery Effort, which manages the stewardship program. Additional provisions adjust funding for union apprenticeship programs, set requirements for a 14-member voting board and mandate manufacturer disclosure of certain chemicals used in carpets.

Bag-in-box fee capped at 12 cents

SB 1341 temporarily caps the bottle-bill processing fee for bag-in-box beverage containers — formats used for boxed wine among others — at 12 cents per container. The cap sunsets on Jan. 1, 2031.

The fee mechanics explain the intervention. CalRecycle sets processing payments per container type by calculating the gap between recycling costs and scrap value; materials with higher scrap values carry lower payments. Certain wine containers joined the bottle bill in 2024, including bag-in-box formats with multilayered pouches and paperboard cartons. CalRecycle initially set an estimated processing fee while collecting recycling data.

With that data in hand, CalRecycle set the 2026 fee for bag-in-box containers at more than 30 cents per container — 50 times the 2025 level, per the bill analysis. Lawmakers flagged the risk to packaging manufacturers that had not budgeted for such a jump. SB 1341's 12-cent ceiling is framed as a "middle ground" that still pays recyclers for handling the material while "allowing wine manufacturers to remain solvent." The 2031 sunset is designed to push bag-in-box producers toward "more recyclable alternatives." TetraPak supported the bill.

Food donation credit extended

Newsom signed SB 881 on Sunday, extending a 15% tax credit for qualified agricultural donations from 2027 to 2032. Farmers, growers and food producers use the credit to cover the costs of harvesting and donating food that would otherwise go to waste. The bill also extends a program letting Californians direct part of their tax refund to food banks.

The California Association of Food Banks and Californians Against Waste supported the measure. "California grows more than enough food to feed its people, yet too much of that food goes to waste while families are continually struggling to put food on the table," said Nick Lapis, director of advocacy at Californians Against Waste, in a statement.

The immediate compliance deadlines for operators are fixed: the force majeure restrictions bind all new and amended hauling contracts from Jan. 1, 2027, carpet collection and PCR obligations phase in through 2028 and 2029, and the 12-cent bag-in-box fee cap expires Jan. 1, 2031 — the date by which lawmakers expect the format either redesigned or displaced.