A proposal introduced on Monday requires stores larger than 5,000 square feet to set up an in-store recycling program and sell reusable bags.
Some 700 food stores plus large retailers such as Target and Home Depot would have to collect used bags and provide a system for turning them over to a manufacturer or to third-party recycling firms.
Stores would be required to use bags printed with a reminder to consumers: "Please return this bag to a participating store for recycling."
Environmentalists have targeted plastic bags as a scourge that take years to biodegrade and contaminate soil and water.
"We think this strikes the right balance between conscience and convenience," said Councilman Peter Vallone, a co-sponsor of the bill, which needs approval from the city council and environmentally minded Mayor Michael Bloomberg.
The bill was expected to come to a vote within several months.
In 2002, Ireland introduced a tax on plastic bags, reducing their use by 90 percent. Some communities in Australia have banned them in retail stores since 2003.
In March, San Francisco became the first U.S. city to ban plastic bags from large supermarkets and the state of California enacted a law in July that requires large stores to take back plastic bags and encourage their reuse.
Americans use an estimated 84 billion plastic bags annually, and the production of plastic bags worldwide uses over 12 million barrels of oil per year, the council said.
Recycled bags can be used to produce new bags plus a variety of plastic products, including furniture.
Estimates vary widely for how long it takes plastic bags to decompose, and some environmentalists say it is impossible to know because plastics have only been used commercially in recent decades.
© Reuters 2007