2022 -- H 7013

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LC003511

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS --

DISCLOSURE OF INFORMATION BY ONLINE MARKETPLACES

     

     Introduced By: Representatives Kennedy, Azzinaro, Edwards, Solomon, Ackerman,
Craven, Phillips, Abney, Kazarian, and Shanley

     Date Introduced: January 10, 2022

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

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     SECTION 1. Title 6 of the General Laws entitled "COMMERCIAL LAW - GENERAL

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REGULATORY PROVISIONS" is hereby amended by adding thereto the following chapter:

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CHAPTER 59

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DISCLOSURE OF INFORMATION BY ONLINE MARKETPLACES

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     6-59-1. Definitions.

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     As used in this chapter:

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     (1) "Consumer product” means any tangible personal property which is distributed in

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commerce and which is normally used for personal, family, or household purposes (including any

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such property intended to be attached to or installed in any real property without regard to whether

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it is so attached or installed).

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     (2) "High-volume third-party seller" means a participant in an online marketplace who is a

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third-party seller and who, in any continuous twelve (12) month period during the previous twenty-

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four (24) months, has entered into two hundred (200) or more discrete sales or transactions of new

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or unused consumer products resulting in the accumulation of an aggregate total of five thousand

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dollars ($5,000) or more in gross revenues.

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     (3) "Online marketplace" means any electronically based or accessed platform that:

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     (i) Includes features that allow for, facilitate, or enable third-party sellers to engage in the

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sale, purchase, payment, storage, shipping, or delivery of a consumer product in the United States;

 

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and

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     (ii) Hosts one or more third-party sellers.

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     (4) "Seller" means a person who sells, offers to sell, or contracts to sell a consumer product

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through an online marketplace.

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     (5) "Third-party seller" means any seller, independent of an operator, facilitator, or owner

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of an online marketplace, who sells, offers to sell, or contracts to sell a consumer product in the

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United States through an online marketplace. The term "third-party seller" does not include a seller

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who:

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     (i) Is a business entity that has made available to the general public the entity’s name,

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business address, and working contact information; or

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     (ii) Has an ongoing contractual relationship with the owner of the online marketplace to

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provide for the manufacture, distribution, wholesaling, or fulfillment of shipments of consumer

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products; and

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     (iii) Has provided to the online marketplace identifying information that has been verified

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pursuant to this chapter.

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     (6) "Verify" means to confirm information provided to an online marketplace pursuant to

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this section by the use of a third-party or proprietary identity verification system that has the

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capability to confirm a seller’s name, email address, physical address, and phone number; or a

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combination of two (2) factor authentication, public records search, and the presentation of a

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government-issued identification.

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     6-59-2. Verification required.

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     (a) Online marketplaces shall require that any high-volume third-party seller on the online

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marketplace provide the online marketplace with the following information within twenty-four (24)

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hours of becoming a high-volume third-party seller:

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     (1) Bank account information, the accuracy of which has been confirmed directly by the

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online marketplace or by a payment processor or other third-party contracted by the online

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marketplace, or, if the high-volume third-party seller does not have a bank account, the name of

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the payee for payments issued by the online marketplace to the high-volume third-party seller. Such

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bank account or payee information may be provided by the seller either:

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      (i) To the online marketplace; or

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     (ii) To a payment processor or other third-party contracted by the online marketplace to

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maintain such information, provided that the online marketplace may obtain such information on

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demand from such payment processor or other third-party.

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     (2) Contact information, including:

 

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     (i) If the high-volume third-party seller is an individual, a copy of a government issued

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photo identification for the individual that includes the individual’s name and physical address; or

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      (ii) If the high-volume third-party seller is not an individual, either:

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     (A) A copy of a government-issued photo identification for an individual acting on behalf

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of the high-volume third-party seller that includes the individual’s name and physical address; or

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(B) A copy of a government-issued record or tax document that includes the business name

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and physical address of the high-volume third-party seller; and

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     (iii) A working email address and working phone number for the high-volume third-party

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seller.

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     (3) A business tax identification number or, if the high-volume third-party seller does not

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have a business tax identification number, a taxpayer identification number.

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     (4) Whether the high-volume third-party seller is exclusively advertising or offering the

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consumer product or products on the online marketplace, or if the high-volume third-party seller is

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currently advertising or offering for sale the same consumer product or products on any other

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Internet websites other than the online marketplace.

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     (b) Ongoing verification required. The online marketplace shall verify the information

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provided in subsection (a) of this section within three (3) days, and shall verify within three (3)

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days any changes to such information that is provided to the marketplace by a high-volume third-

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party seller. If a high-volume third-party seller provides a copy of a valid government-issued tax

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document, information contained within such tax document shall be presumed to be verified as of

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the date of issuance of such record or document. The online marketplace shall, on at least an annual

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basis, notify each high-volume third-party seller on the online marketplace that the seller must

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inform the online marketplace of any changes to the information provided by the seller pursuant to

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subsection (a) of this section within three (3) days of receiving the notification and shall instruct

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each high-volume third-party seller, as part of the notification, to electronically certify either that

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the seller’s information is unchanged or that the seller is providing changes to the information. If

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the online marketplace becomes aware that a high-volume third-party seller has neither certified

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that the seller’s information is unchanged nor has not provided such changed information within

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three (3) days of receiving such notification, the online marketplace shall suspend the high-volume

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third-party seller’s participation on the marketplace until the seller has either certified that the

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seller’s information is unchanged or has provided such changed information and the information

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has been verified.

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     6-59-3. Disclosure required.

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     (a) Any online marketplace shall require a high-volume third-party seller in such online

 

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marketplace to provide, and shall disclose to consumers in a conspicuous manner either on the

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product listing or, for information other than the seller’s full name, through a conspicuously placed

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link on the product listing, the following information:

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     (1) The identity of the high-volume third-party seller which shall include the full name of

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the seller, the full physical address of the seller, whether the seller also engages in the

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manufacturing, importing, or reselling of consumer products; and the contact information for the

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seller, including a working phone number and working email address. Such working email address

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may be provided to the high-volume third-party seller by the online marketplace;

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     (2) Any other information determined to be necessary to address circumvention or evasion

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of the requirements of this subsection, provided that the additional information is limited to what

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is necessary to address such circumvention or evasion.

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     6-59-4. Exceptions.

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     Upon the request of a high-volume third-party seller, an online marketplace may provide

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for partial disclosure of the identity information required under this chapter in the following

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situations:

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     (1) If the high-volume third-party seller demonstrates to the online marketplace that the

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seller does not have a business address and only has a residential street address, the online

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marketplace may direct the high-volume third-party seller to disclose only the country and, if

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applicable, the state in which the high-volume third-party seller resides on the product listing, and

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may inform consumers that there is no business address available for the seller and that consumer

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inquiries should be submitted to the seller by phone or email;

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     (2) If the high-volume third-party seller demonstrates to the online marketplace that the

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seller is a business that has a physical address for product returns, the online marketplace may direct

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the high-volume third-party seller to disclose the seller’s physical address for product returns;

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     (3) If a high-volume third-party seller demonstrates to the online marketplace that the seller

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does not have a phone number other than a personal phone number, the online marketplace shall

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inform consumers that there is no phone number available for the seller and that consumer inquiries

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should be submitted to the seller’s email address.

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     6-59-5. Limitations to Exceptions.

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     If an online marketplace becomes aware that a high-volume third-party seller has made a

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false representation to the online marketplace in order to justify the provision of a partial disclosure

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under this chapter or that a high-volume third-party seller who has requested and received a

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provision for a partial disclosure this chapter has not provided responsive answers within a

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reasonable timeframe to consumer inquiries submitted to the seller by phone or email address, the

 

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online marketplace shall withdraw its provision for partial disclosure and require the full disclosure

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of the high-volume third-party seller’s identity information required under this chapter upon

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receiving three (3) business days’ notice to the high-volume third-party seller.

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     6-59-6. Reporting mechanism.

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     An online marketplace shall disclose to consumers, in a conspicuous manner on the product

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listing of any high-volume third-party seller, a reporting mechanism that allows for electronic and

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telephonic reporting of suspicious marketplace activity to the online marketplace and a message

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encouraging individuals seeking goods for purchase to report suspicious activity to the online

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marketplace.

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     6-59-7. Fulfillment or shipment by different party than seller.

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     In addition to any other requirements provided for herein, an online marketplace that

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warehouses, distributes, or otherwise fulfills a consumer product order shall disclose to the

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consumer the identification of any high-volume third-party seller supplying the consumer product

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if different than the seller listed on the product listing page.

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     6-59-8. Enforcement. Unfair and deceptive acts or practices.

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     Any violation of this chapter shall be treated as a violation of chapters 13 and 13.1 of title

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6.

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     6-59-9. Powers of the attorney general.

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     The attorney general shall enforce the provisions of this chapter.

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     6-59-10. Regulations.

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     The office of the attorney general, consumer protection division shall promulgate such

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rules and regulations with respect to collecting and verifying information under this chapter,

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provided that such regulations are limited to what is necessary to collect and verify such

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information.

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     6-59-11. Preemption.

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     No political subdivision may establish, mandate, or otherwise require online marketplaces

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to verify information from high-volume third-party sellers on a one-time or ongoing basis or

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disclose information to consumers.

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     SECTION 2. This act shall take effect on January 1, 2023.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS --

DISCLOSURE OF INFORMATION BY ONLINE MARKETPLACES

***

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     This act would require high-volume third-party sellers, selling consumer goods on online

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marketplaces, to provide certain information to the marketplaces and disclose certain information

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to consumers on product listings.

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     The act also requires online marketplaces to verify information provided by high-volume

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third-party sellers and periodically require those sellers to verify or update the information.

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     This act would take effect on January 1, 2023.

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