California’s Responsible Textile Recovery Act of 2024 (herein, the “Act”) creates new registration, product-classification, record, and contract questions for apparel companies selling into the state. For Los Angeles founders, established labels, licensors, importers, distributors, retailers, and marketplace sellers, our Fashion Law practice can assist with identifying the business that may qualify as the statutory producer and reviewing the commercial agreements that support that conclusion.
Commonly known as SB 707, the Act establishes a statewide extended producer responsibility program for covered apparel and textile articles. (Pub. Resources Code, §§ 42984–42984.27; Stats. 2024, ch. 864 (SB 707, Newman).) Its stated purpose includes diverting postconsumer products from landfills and increasing repair, reuse, and recycling. The system is being introduced in stages, so brands must distinguish current registration duties from later reporting, fee, collection, and sales requirements.
Current Status of the California Textile Recovery Law for Fashion Brands
CalRecycle approved Landbell USA as the producer responsibility organization, or PRO, on February 27, 2026. CalRecycle states that all producers of covered products had to join Landbell USA by July 1, 2026. Its current program page also shows that regulatory development remains underway, including workshops on definitions, online marketplaces, PRO submissions, producer identification, exemptions, collection, reuse, and repair.
The July 1, 2026 membership date has passed. A company that appears to meet the producer definition and has not registered should review its status promptly, contact the approved PRO, preserve its communications, and obtain legal advice about its present position.
Later stages remain ahead. CalRecycle’s implementing regulations cannot take effect before July 1, 2028. The PRO must have an approved stewardship plan by July 1, 2030, and CalRecycle lists 2031 as the anticipated year for full plan implementation.
Which Businesses May Qualify as Producers?
The statutory term “producer” does not always mean the factory that cuts and sews a garment. SB 707 applies a sequence that can place responsibility on a manufacturer, brand owner, exclusive licensee, importer, distributor, retailer, or wholesaler.
First, the producer is a person who manufactures a covered product and owns or licenses the brand or trademark under which the product is sold, offered for sale, or distributed into California. (Pub. Resources Code, § 42984.3, subd. (s).)
If no person in California fits that category, responsibility moves to the brand or trademark owner. If the owner is outside California, an exclusive licensee in California can fall within the next category. The Act defines an exclusive licensee by reference to the exclusive California right to use the relevant brand or trademark in connection with manufacturing, sale, or distribution of the covered product.
If neither category identifies a California producer, the person importing the product into California for sale or distribution may become the producer. If no earlier category applies, responsibility can move to the distributor, retailer, or wholesaler selling the product in or into California. A sale is treated as occurring in California when the product is delivered to a consumer in the state.
This sequence can affect private-label lines, designer licenses, celebrity collaborations, overseas manufacturing, drop-shipping, direct-to-consumer sales, wholesale arrangements, showroom distribution, and marketplace transactions. A brand should review each product line and sales structure rather than assume that one entity occupies the same position across its entire catalog.
Can Another Company Assume Producer Duties?
The Act allows a company that manufactures, distributes, imports, offers for sale, or sells a covered product to assume some or all producer duties and liabilities, relieving another participant of those duties and liabilities.
Fashion companies can document that allocation in manufacturing, licensing, importing, distribution, marketplace, fulfillment, or retail agreements. The agreement should identify the relevant brands and product categories, the entity acting as producer, registration responsibility, fee responsibility, data-delivery deadlines, audit rights, correction procedures, and cooperation after termination.
A private agreement should match the parties’ actual conduct. Conflict can arise when a contract assigns producer duties to an importer, while brand records, PRO registration, marketplace accounts, invoices, or communications identify another entity.
Does the Small-Seller Exclusion Apply?
The producer definition excludes a seller with less than $1 million in annual aggregate global turnover. (Pub. Resources Code, § 42984.3, subd. (s)(8).) The figure is adjusted annually under the California Consumer Price Index measure specified in the Act. It is a global-turnover test, not a California-revenue test.
The calculation can include the seller and connected entities identified through ownership, voting, appointment, or management rights. A Los Angeles label with limited direct revenue may still need to count the turnover of a parent, controlled company, controlling company, or other entity connected under the statutory rules.
The Act also excludes a seller that only sells secondhand covered products. A business selling both new and secondhand goods should not assume that this exclusion applies to its full operation.
Companies relying on either exclusion should keep a dated written analysis supported by ownership records, financial information, product data, and sales-channel records. The analysis should be revisited after financing, acquisitions, restructuring, new licenses, or significant revenue growth.
Which Apparel Products Are Covered?
The Act defines apparel as clothing and accessory items intended for regular wear, formal occasions, or outdoor activities. The statutory list includes undergarments, shirts, pants, skirts, dresses, overalls, bodysuits, costumes, vests, dancewear, suits, saris, scarves, tops, leggings, school uniforms, leisurewear, athletic wear, sports uniforms, swimwear, formal wear, onesies, bibs, footwear, handbags, backpacks, knitted and woven accessories, jackets, coats, snow pants, ski pants, and everyday uniforms for workwear. (Pub. Resources Code, § 42984.3, subd. (a).)
The express inclusion of footwear, handbags, backpacks, accessories, sportswear, and uniforms means a company should not limit its review to conventional garments.
The apparel definition excludes personal protective equipment and clothing items for use by the United States military. It also excludes personal protective equipment worn against health or environmental hazards, certain reusable absorbent products, and specified reusable products regulated by the United States Food and Drug Administration. Military-inspired consumer clothing is not automatically excluded merely because its design resembles military apparel.
Which Textile Articles Are Covered?
A textile article is an item customarily used in a household or business and made entirely or primarily from natural, artificial, or synthetic fiber, yarn, or fabric. The statute states that this category includes only blankets, curtains, fabric window coverings, knitted and woven accessories, towels, tapestries, bedding, tablecloths, napkins, linens, and pillows. (Pub. Resources Code, § 42984.3, subd. (ae).)
Single-use paper towels, paper napkins, toilet paper, facial tissue, and wet or dry wipes are excluded. Covered products also exclude products governed by California’s mattress, electronic-waste, and carpet stewardship laws, along with the automated and manual window coverings described in the Act.
The phrase “includes only” is important. Not every fabric-based household product is a covered textile article. Brands should classify goods at the SKU or product-family level and keep the basis for each classification.
What PRO Membership Means for a Fashion Brand
Producers of covered products must form and join a PRO, and each producer covered by a PRO must register under that organization’s procedures. CalRecycle approved Landbell USA for this role and states that covered producers had to join by July 1, 2026.
Membership is the current starting point, not the final form of the statewide system. The initial needs assessment is due by March 1, 2027. (Pub. Resources Code, § 42984.6.) After regulations take effect, the PRO must submit a stewardship plan covering collection, transportation, repair, recycling, funding, education, and other program requirements. (Pub. Resources Code, § 42984.8.)
After the plan is approved, participating producers will pay annual eco-modulated fees. The fee structure must reflect sales volumes, program costs, existing producer recovery programs, and factors connected to reuse, repair, and recycling. The final methodology has not yet been adopted.
A producer should not treat current PRO membership as proof that every future product, report, or payment duty has been completed. Product additions, brand changes, licensing changes, acquisitions, importing changes, and new sales channels may require further review.
Records Brands Should Collect From Manufacturers and Distributors
CalRecycle has not adopted the final long-term producer reporting format. The Act’s classification rules, audit provisions, future annual reports, and fee structure still show the categories of information that brands should begin organizing.
A practical record set can include:
- Brand and trademark ownership records
- Trademark and merchandise license agreements
- Manufacturing and sourcing contracts
- Importer-of-record and customs documents
- Distributor, wholesale, fulfillment, and marketplace agreements
- California unit sales by SKU and sales channel
- Delivery-location data
- Product descriptions and covered-product classifications
- Fiber composition and product weight
- Harmonized Tariff Schedule numbers
- Returns, cancellations, and secondhand transactions
- Corporate ownership and control records
- Documents identifying a party that assumed producer duties
This is a practical preparation list, not a final CalRecycle submission form. Still, the future PRO annual report must include covered-product sales into California divided by fiber-type category and Harmonized Tariff Schedule number. It also must address product weights, collection, reuse, repair, recycling, costs, and fees.
Manufacturing and distribution contracts should require timely access to product-composition, tariff, origin, shipment, and sales information. A general promise to comply with all laws may not provide the detailed data needed for producer classification or future reporting.
Five-Year Records and Agency Requests
Records required under the Act must be maintained and accessible for five years. Reports and records provided to CalRecycle must be supplied under penalty of perjury. A producer, PRO, manufacturer, distributor, retailer, or importer may also have to provide relevant records within 14 days after a CalRecycle request. (Pub. Resources Code, §§ 42984.20–42984.24.)
A fashion company should assign responsibility for agency communications and maintain records in a form that can be retrieved without delay. Relevant files may sit with accounting staff, factories, customs brokers, distributors, fulfillment providers, online platforms, or outside trademark counsel.
Supply-chain agreements can require the other party to retain specified records, provide them within a set period, correct errors, and continue cooperating after the business relationship ends.
Contract Allocation Between Brand Owners, Licensees, Importers, and Sellers
Many agreements signed before SB 707 do not address textile stewardship registration, California sales data, program fees, end-of-life obligations, or post-termination records.
Companies should review brand licenses, manufacturing contracts, import agreements, distribution arrangements, marketplace terms, fulfillment contracts, and wholesale documents. Our Business Transactions Law practice assists Los Angeles businesses with commercial agreements that allocate duties, information rights, expenses, and remedies across these relationships.
A clear clause should identify:
- The covered brands and products
- The entity acting as producer
- Responsibility for PRO registration
- Responsibility for current and later fees
- Reporting dates and data standards
- Access to factory, importer, and distributor records
- Correction and audit rights
- Notice after product or channel changes
- Cooperation after termination
- Reimbursement or indemnity terms
The agreement should also address changes in trademark ownership, license exclusivity, importing arrangements, product composition, manufacturing location, distribution channels, and corporate control. Each change can affect producer classification or the data supporting that classification.
Marketplace Reporting and Third-Party Sellers
Online marketplaces will have an annual reporting duty under regulations adopted by CalRecycle. Because those regulations cannot take effect before July 1, 2028, the marketplace reporting system should not be described as a completed annual filing requirement in 2026.
Under the future statutory rule, an online marketplace must notify CalRecycle and the PRO about third-party sellers with more than $1 million in covered-product sales through that marketplace during the preceding year, provided the seller also had California sales. Only transactions for which payment was processed by the marketplace directly or through its payment processor count toward that marketplace calculation. The platform must also give the identified sellers information about program requirements. (Pub. Resources Code, § 42984.27.)
Marketplace reporting does not automatically transfer producer responsibility to the platform. A brand owner, manufacturer, exclusive licensee, importer, distributor, retailer, or wholesaler may still fall within the producer sequence.
Brands selling through major platforms should preserve seller-account identifiers, legal entity names, California delivery data, payment-processor records, refunds, canceled transactions, brand records, platform notices, and channel-level sales reports. SRP’s New Media and E-Commerce Law practice addresses commercial and legal issues arising from online sales structures and platform relationships.
Risks Connected to Missed Program Obligations
The Act authorizes administrative civil penalties of up to $10,000 per day for a violation and up to $50,000 per day for an intentional or knowing violation. (Pub. Resources Code, § 42984.21.) The amount is not automatic. The statute directs CalRecycle or a reviewing court to consider factors such as the nature and severity of the violation, economic effect, good-faith compliance measures, willfulness, deterrence, and other factors required by justice.
CalRecycle must establish the penalty-assessment procedure through regulations, including an informal hearing process. A separate producer provision states that penalties tied to PRO participation and accounting for covered products apply after plan approval or from July 1, 2030, whichever occurs first.
The July 1, 2026 membership duty remains stated in the Act and repeated on CalRecycle’s current website. A missed membership date should not be described as an automatic maximum daily penalty, but it should not be ignored.
The program also creates a future market-access risk. Within 12 months after the regulations take effect, CalRecycle must publish a compliance list. (Pub. Resources Code, § 42984.20.) After plan approval, retailers, importers, distributors, and online marketplaces generally may not sell, distribute, offer for sale, or import a covered product into California unless the producer, brand, and product appear as compliant, subject to statutory exceptions. The Act contains limited provisions for existing inventory and sellers that perform the applicable producer duties.
Commercial risk can arise earlier. Retailers, platforms, investors, lenders, licensors, buyers, and acquisition counsel may request proof of producer status, PRO registration, data rights, and contract allocation. Disputes can also develop among brand owners, licensees, importers, and sellers over registration costs, later fees, missing records, or inaccurate sales data.
Steps for Newly Launched Los Angeles Labels
A newly launched Los Angeles label should start with an entity-and-brand map. The map should identify the trademark owner, relevant licensees, contracting manufacturer, importer of record, distributor, fulfillment provider, marketplace seller, wholesaler, and retailer for each product line.
The label should then classify each SKU against the Act’s closed apparel and textile lists. Footwear, handbags, backpacks, knitted accessories, sportswear, uniforms, bedding, towels, and home-textile products merit separate review. Excluded products and secondhand goods should be documented.
Next, the company should calculate annual aggregate global turnover under the statutory ownership and control rules. The review should include parents, subsidiaries, commonly controlled entities, and foreign companies connected through the rights listed in the Act.
A company that appears to meet the producer definition should confirm its PRO registration status. A company relying on an exclusion should retain a dated analysis and supporting financial, ownership, product, and sales records.
The label should also build a California sales ledger by SKU and channel, collect fiber and tariff information from manufacturers, preserve importing records, assign an internal compliance lead, and track CalRecycle’s rulemaking and PRO communications.
Finally, the company should revise licensing, manufacturing, importing, distribution, marketplace, fulfillment, and wholesale agreements before a dispute develops over producer status, fees, or missing data.
How We Assist Los Angeles Fashion Companies
California’s textile recovery program can affect brand ownership, trademark licensing, manufacturing, importing, e-commerce, distribution, product data, and commercial contracts at the same time.
We assist Los Angeles fashion founders and established apparel companies with producer-classification analysis, product mapping, contract revisions, responsibility clauses, record systems, marketplace arrangements, and disputes involving program costs or incomplete information.
Early legal review can bring clarity before a retailer, platform, investor, lender, licensor, buyer, or business partner requests registration records or seeks to assign program costs. Companies can use our contact page to schedule a confidential strategy call.
Frequently Asked Questions
Does SB 707 apply to a fashion brand located outside California?
It can. The Act states that a producer selling, offering for sale, or distributing a covered product into California can be responsible even when that producer is located outside the state. Delivery to a California consumer is treated as a sale in California.
Are footwear, handbags, and backpacks covered?
Yes. All three appear in the statutory apparel list. A product-specific exclusion may still apply to certain protective, military, medical, electronic, carpet, mattress, or window-covering products.
Is every fashion company below $1 million excluded?
No. The test uses annual aggregate global turnover and can include connected entities under the Act’s ownership and control rules. A company should not look only at California revenue or the revenue of one operating entity.
Does an online marketplace register a brand automatically?
The Act does not state that marketplace reporting replaces producer registration. The statutory producer sequence still applies to the relevant manufacturer, brand owner, exclusive licensee, importer, distributor, retailer, or wholesaler.
What should a producer do after missing the July 1, 2026 membership date?
A company that appears to meet the producer definition should review its position promptly, contact the approved PRO, preserve its communications, and obtain legal advice based on its products, entities, and sales structure. CalRecycle continues to list Landbell USA as the approved PRO and July 1, 2026 as the membership date.
How long must records be retained?
Records required under the Act must remain maintained and accessible for five years. Relevant records may have to be supplied within 14 days after a CalRecycle request, and records provided to the agency are submitted under penalty of perjury.
Can a brand owner assign producer duties to an importer or distributor?
The Act permits another listed supply-chain participant to assume some or all producer duties and liabilities. The parties should document the allocation clearly and keep their registration, reporting, and operational records consistent with that allocation.
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