What AB 978 Changes
AB 978 (Hoover, 2025) amends Public Resources Code § 42704.6 to make two fundamental changes to California's recycled materials mandate for local agency street and highway projects.
First, it eliminates the January 1, 2027 sunset date that existed under prior law. The prior version of § 42704.6 required local agencies to allow recycled materials at or above the levels set in the Caltrans standard specifications that went into effect on October 22, 2018 — but only until 2027. AB 978 makes this requirement permanent with no expiration.
Second, it replaces the frozen 2018 baseline with a dynamic reference. Under AB 978, local standard specifications must allow recycled materials at levels no less than Caltrans' specifications "as those standard specifications may be amended or updated from time to time." This means as Caltrans updates its specifications, local agencies must keep pace automatically — there is no longer a static floor that becomes outdated.
The bill was signed on October 7, 2025 and takes effect January 1, 2026. It amends Public Resources Code § 42704.6, originally enacted as part of the California Integrated Waste Management Act of 1989 (Pub. Resources Code § 40000 et seq.).
Who This Matters To In City Hall
| Role | Why This Matters to You |
|---|---|
| Public Works Director | Primary compliance owner. Your standard specifications for street and highway materials must be reviewed and updated to align with current Caltrans specs by January 1, 2026. Ongoing obligation to track Caltrans updates. |
| City Engineer | Responsible for drafting and maintaining bid specifications. The three Caltrans spec sections directly governing material composition — §§ 25-1.02, 26-1.02 (base/subbase), § 39-2.02B (asphalt), §§ 90-1.02, 90-2.02, 90-9 (concrete) — must be reflected in your agency's boilerplate. |
| Purchasing / Contracting Officer | Bid documents for materials contracts must incorporate the updated spec language. The new transparency obligation — responding to bidder feasibility inquiries via email — requires a defined internal workflow. |
| City Manager / CAO | If your agency relies on the feasibility exception, that determination must now be documented and disclosed on request. Budget for potential state mandate reimbursement review by the Commission on State Mandates. |
| City Attorney | Review feasibility determination procedures and email-response obligations under subdivision (c) for legal adequacy. Advise on state mandate claim eligibility under Government Code § 17500 et seq. |
The Three Covered Material Categories
AB 978 specifies exactly which material categories are subject to the mandate, keyed directly to sections of the Caltrans Standard Specifications:
- Recycled base and subbase materials — governed by Caltrans Standard Specifications §§ 25-1.02 and 26-1.02. These cover aggregate base and subbase layers used in roadway construction.
- Reclaimed asphalt pavement (RAP) and other materials in asphalt — governed by Caltrans Standard Specifications § 39-2.02B. RAP is the most widely used recycled material in paving; this section sets permissible RAP content and blending rules.
- Reclaimed aggregate, fly ash, returned plastic concrete, and other materials in concrete — governed by Caltrans Standard Specifications §§ 90-1.02, 90-2.02, and 90-9. This covers supplementary cementitious materials (SCMs) including fly ash and recycled concrete aggregate.
Local agencies may exceed Caltrans' maximum recycled material levels if they choose (Pub. Resources Code § 42704.6(d)). The statute sets a floor, not a ceiling.
The Feasibility Exception and New Transparency Rule
Prior law allowed agencies to depart from the recycled materials mandate when use of those materials was not "feasible and cost effective." AB 978 preserves that feasibility carve-out but adds a new transparency obligation that did not previously exist.
Under Public Resources Code § 42704.6(c), when a local agency's standard specifications do not allow recycled materials at the Caltrans-level because the agency has determined it is not feasible:
- A bidder on a materials contract may request the agency's reason for that determination.
- The agency must respond via email to the bidder's official point of contact identified in the request.
The statute does not prescribe a response deadline or a format beyond email correspondence. Agencies should adopt an internal procedure — routing the request to the Public Works Director or City Engineer — to ensure timely and consistent responses.
Practice note: A feasibility determination should be grounded in documented engineering or cost analysis, not convenience. If challenged, an undocumented determination may be difficult to defend. Work with your City Attorney to establish a record-keeping protocol before the first bidder request arrives.
Which Agencies Are Exempt
The definition of "local agency that has jurisdiction over a street or highway" under § 42704.6(e)(2) expressly excludes:
- Special districts — entirely excluded, regardless of size.
- Cities with a population of 25,000 or fewer — based on the most recent federal decennial census.
- Counties with a population of 100,000 or fewer — based on the most recent federal decennial census.
Agencies should verify their current census population figures. The 2020 U.S. Census is the operative baseline until updated figures are released; agencies near the threshold should note that the law tracks the "most recent census," so the threshold is tested at the time of each project, not locked to the effective date of AB 978.
Compliance Risk Assessment
| Requirement | Risk Level | Notes |
|---|---|---|
| Standard specs must meet current Caltrans recycled material levels (§ 42704.6(b)) | HIGH | Specs frozen to pre-2026 versions or the 2018 baseline will be noncompliant on January 1, 2026. Immediate spec audit required. |
| Tracking future Caltrans spec updates (dynamic obligation) | HIGH | Unlike prior law's static 2018 floor, compliance now requires monitoring Caltrans updates on an ongoing basis. Establish a review cycle. |
| Feasibility determination documentation | MEDIUM | Undocumented departures from the mandate are now exposed to bidder transparency requests. Internal procedures needed before January 1, 2026. |
| Email-response workflow for bidder inquiries (§ 42704.6(c)) | MEDIUM | No specific response deadline is set, but unreasonable delay could expose the agency to bid protest risk. Designate a responsible contact. |
| Population threshold verification for exemption eligibility | LOW | Agencies near the 25,000 / 100,000 thresholds should confirm census figures and document the basis for claiming exemption. |
Key Deadlines
- January 1, 2026 — AB 978 takes effect. All covered local agencies must have standard specifications that allow recycled materials at Caltrans-equivalent levels for the three covered categories.
- Before January 1, 2026 — Complete a line-by-line comparison of your agency's material specifications against current Caltrans Standard Specifications §§ 25-1.02, 26-1.02, 39-2.02B, 90-1.02, 90-2.02, and 90-9.
- Ongoing — Monitor Caltrans Standard Specification amendments. The obligation is dynamic; Caltrans updates the specifications periodically, and your local specs must stay current.
Immediate Action Checklist
- Determine whether your agency qualifies for the small-city or small-county exemption (population ≤25,000 for cities; ≤100,000 for counties under 2020 Census).
- Pull the current Caltrans Standard Specifications and compare your agency's boilerplate for base/subbase (§§ 25-1.02, 26-1.02), asphalt (§ 39-2.02B), and concrete (§§ 90-1.02, 90-2.02, 90-9) material sections.
- Identify any material categories where your current specs fall below Caltrans minimums and prepare amendments.
- If your agency uses the feasibility exception for any category, document the engineering or cost basis in a written determination memo.
- Designate a contact person (typically the City Engineer or Public Works Director) to receive and respond to bidder feasibility inquiries via email.
- Establish a calendar reminder or internal workflow to check Caltrans Standard Specification updates annually — or whenever Caltrans publishes an amendment affecting §§ 25-1.02, 26-1.02, 39-2.02B, 90-1.02, 90-2.02, or 90-9.
- Consult the City Attorney regarding whether a state mandate reimbursement claim is appropriate if implementation imposes identifiable costs.
State Mandate Reimbursement Considerations
AB 978 includes a standard state mandate clause (Section 2 of the chaptered bill). If the Commission on State Mandates determines that AB 978 imposes costs mandated by the state on local agencies or school districts, reimbursement must be made pursuant to Part 7 (commencing with § 17500) of Division 4 of Title 2 of the Government Code.
Agencies that incur identifiable additional costs in updating specifications or responding to bidder inquiries should preserve records and consult their City Attorney about filing a mandate claim. In practice, the Commission has broad discretion, and small incremental administrative costs are often deemed not reimbursable — but the claim avenue exists.
Municipal Code and Specification Provisions to Review
Review any locally adopted standard specifications, master specifications, or green building policies that reference recycled material content. Common locations in city codes and practices where inconsistencies arise:
- Public works standard plans and specifications (often adopted by resolution, not municipal code)
- Local purchasing policies that specify material composition requirements
- Any sustainability or green infrastructure ordinances that set separate recycled content targets
- Local concrete and asphalt specifications that pre-date the Caltrans 2018 or later amendments
Wondering whether your agency's current public works specifications are consistent with AB 978 and current Caltrans standards? Legislaide's Code Statutory Analysis identifies gaps between your adopted specifications and state law obligations, with guidance from experienced municipal law professionals.
Published April 13, 2026 by Legal Team at Legislaide.