Updates to Colorado AI Act expected

In a letter sent to businesses last week, Colorado Governor Polis, Attorney General Weiser, and State Senator Rodriguez outlined the changes they’d like to see made to the recently-passed Colorado Artificial Intelligence Act, which was signed into law on May 17, 2024, and is slated to take effect on February 1, 2026.

Initial reactions to the bill from industry were mixed. Prior to its enactment, several industry groups urged Governor Polis to veto the bill due concerns around the potential for the bill to hamper innovation and put small businesses at a disadvantage against large corporations. 

For a summary of obligations under the Act, see our blog post. And for practical takeaways on next steps, listen to our Data Chronicles podcast episode.

Key Takeaways

Although the Governor signed the bill sponsored by Senator Rodriguez and supported by Attorney General Weiser, they acknowledge in the letter that the recently passed legislation could benefit from “additional clarity” and “improvements.”

The letter identifies several areas to address:

• Refining the definition of AI systems to the most high-risk systems in order to align the definition with federal measures and other frameworks established by states with substantial technology sectors;
• Focusing regulation on the developers of high-risk systems rather than on smaller companies that may deploy AI within third party software that they use in the ordinary course of business;
• Shifting from a proactive disclosure regime to the traditional enforcement regime managed by the Attorney General investigating matters after the fact;
• Making clear that the consumer right of appeal refers to the ability of consumers to appeal to the CO AG about matters they believe warrant investigation, related to any discrimination resulting from the use of AI. Moreover, consumers also have the right to bring a matter to the attention of the CO Civil Rights Commission relating to alleged discrimination; and
• Considering other measures the state can take to become the most welcoming environment for technological innovation while preventing discrimination, especially for early-stage companies.

The Governor, Attorney General, and Senator also seem aware that they are opening the door to another patchwork of state regulation and signaled efforts to align with “forthcoming regulation in other states” (perhaps a reference to rulemaking activities in California). They noted:

“It is our intention that Colorado’s action in this space signals to federal policymakers the interest among states in establishing a national regulatory framework for AI, rather than an intent to create one of 50 distinct regulators frameworks…. We will work to ensure that Colorado’s laws are consistent with forthcoming regulation in other states and do not create unique burdens on Colorado companies and consumers….”

Next Steps

The next opportunity for the legislature to amend the law will come when the General Assembly reconvenes in January 2025, unless the governor or legislature calls a special session. 

The letter notes that “state and legislative leaders” will engage in a process to revise the new law and minimize unintended consequences associated with its implementation, at the direction of the Governor and legislative leadership. The lawmakers further describe that conversations to revise the law will allow for robust stakeholder feedback and will “complement the formal processes already established, including the convening of a legislatively-established task force that will consider issues and propose policy recommendations to the Colorado General Assembly’s Joint Technology Committee related to Artificial Intelligence.”

This is an interesting development for companies who have been considering how to operationalize the Colorado AI Act, a first-of-its-kind law in the U.S., especially in light of similar requirements in California regulations and the forthcoming European Union AI Act. The letter also signals that the Attorney General – who will enforce the law – may not be as aggressive out of the gate in enforcing the AI Act while he waits for clarifications to be passed, or at least issued as guidance.

Authored by Sophie Baum.