The bill by Democratic state Sen. Alan Lowenthal would prohibit restaurants, grocery stores and other vendors from dispensing food in expanded polystyrene containers, commonly known as Styrofoam, beginning in 2016.
If it becomes law, it would make California the first state with such a ban.
Many restaurant owners oppose the bill, saying switching to biodegradable cartons would more than double their costs in an industry where profit margins are razor thin.
Lowenthal said litter from the foam containers is one of the most abundant forms of debris found in city streets, sewers and beaches.
"It's not biodegradable, it's not compostable, and if it's in the water for a long time, it breaks up into small beads and lasts for thousands of years. It costs millions to clean up beaches," he said.
The Associated Press contributed to this report.