See: plastic bag recycling
UPDATE: This law is superseded by the
NY State Plastic Bag Reduction, Reuse and Recycling Act. The NY State Legislature is expected to amend the state law to incorporate some of the elements of NYC's law. Until such amendment occurs, NYC's Plastic Bag Recycling Law is no longer in effect, and retail establishments are bound by the state law.
Law: NYC Administrative Code 
(Search for Title 16, Chapter 4b: Recycling Program for Plastic Carryout Bags and Film Plastic) PDF version
Summary: The New York City Plastic Carryout Bag Recycling Law, enacted as Local Law 1 of 2008 requires any retail or wholesale establishment that sells products and provides plastic carryout bags, and either has over 5,000 square feet of retail space or 5 or more stores located in the City to establish an in-store recycling program for plastic carryout bags.
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