At least 4 bills to reform sweeping AI law expected during Colorado special session

This story was originally published by the Colorado Newsline.

Colorado state lawmakers will convene for a special session Thursday to offset a $1.2 billion revenue shortfall caused by changes in the federal tax code, but they will also consider tweaks to the state’s artificial intelligence law, which is supposed to go into effect in February.

Gov. Jared Polis included the AI issue in his call for the special session earlier this month.

“We want to make sure that this is settled sooner rather than later, and give this Legislature a chance to figure that out. What adjustments need to be made or changes need to be made are up to them,” he said.

Colorado passed a first-in-the-nation sweeping AI regulation in 2024 to set anti-discrimination guardrails for businesses that use the technology in decisions on consequential matters such as loans, employment, insurance policies and school admissions. When Polis signed the law, however, he was clear in his desire for lawmakers to fine tune the policy to ensure it does not hinder technological innovation and development.

An issue task force was supposed to create legislative recommendations for reform that lawmakers could consider during this year’s regular session, but bill backers did not reach a compromise in time.

Now, the Legislature has an opportunity to tweak the AI law with at least four bills on the issue.

Focus on Developers

A bill from the Democratic lawmakers who ran the 2024 bill would narrow the law. It would focus on required disclosures for developers of AI systems — the companies that actually create the technology, versus the deployers who use it. Those developers would need to inform deployers about potential misuses of the technology and steps they’ve taken to mitigate those risks.

Deployers would need to let someone know they are using AI to make a decision about them if it is related to educational enrollment, employment, financial loans, health care, housing, insurance, legal services or a government service. In practice, that could look like a bank notifying a loan applicant of the use of AI in its decision making; when in the process it plans to use AI; and the developer, contact information and system name of the AI.

The bill, Senate Bill 25B-17, would assign developers and deployers joint liability if an AI system violates state law, unless the developer can prove that a deployer misused the technology.

“We’re going to address some of the issues that were brought up during the process of the task force — why are we putting the burden on the deployers, and should it be more on the developers? They are the ones that really have the ultimate responsibility for what their AI does,” said Rep. Brianna Titone, an Arvada Democrat.

Titone is sponsoring the bill alongside Senate Majority Leader Robert Rodriguez and House Assistant Majority Leader Jennifer Bacon, both Denver Democrats.

“We want to make sure that the foundation is good and solid, and we think that the proposal we’re putting out there is going to accomplish that and address the concerns that a lot of people have,” Titone said.

Consumer Protection

A bipartisan group of lawmakers will run a bill to clarify that existing state statute around civil rights laws and consumer protections would also apply to AI. That bill, House Bill 25B-13, would empower the attorney general to sue a developer or deployer that uses AI in a way that violates the Colorado Consumer Protection Act. It would also allow an individual to file a complaint against an AI developer if the system violates the state’s anti-discrimination law.

Additionally, that bill would require developers and deployers to disclose to consumers when they are interacting with AI versus a human.

The bill will be sponsored by Rep. William Lindstedt, a Broomfield Democrat, Rep. Michael Carter, an Aurora Democrat, Sen. Judy Amabile, a Boulder Democrat, and Sen. Lisa Frizell, a Castle Rock Republican.

Redefine ‘Consequential Decision’

Another bill from Rep. Ron Weinberg, a Loveland Republican, would narrow the definition of “consequential decision” in the state’s AI law to include only decisions related to employment or public safety. That would get rid of decisions about school enrollment, finances, government services, housing, insurance, health care services and legal services.

That bill, House Bill 25B-4, would also push the effective date of the law to August 2027, exempt businesses with fewer than 250 employees or less than $5 million in annual revenue, and exempt local governments in towns with fewer than 100,000 residents. It doesn’t have a Senate sponsor.

Repeal

Finally, a bill from Republican Sen. Mark Baisley of Woodland Park would completely repeal the 2024 AI law and update the state’s anti-discrimination laws to prohibit discrimination using any technology. There was no House sponsor for the measure, Senate Bill 25B-12, when it was pre-released on the Legislature’s website.

The special session will likely run into early next week.

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