[co-author: Shelby Dolen]
Key point: Starting August 21, Colorado lawmakers will consider four bills that significantly amend the Colorado AI Act.
On August 21, Colorado lawmakers will reconvene for a special legislative session. Earlier this month, Governor Jared Polis called the special session to deal with a nearly $1 billion hole in Colorado’s state budget created by the federal government’s One Big Beautiful Bill (H.R. 1) and to consider amendments to Colorado’s first-in-the-nation Colorado AI Act.
As of the time of this article, Colorado lawmakers pre-released 27 bills to be introduced during the special session, four of which would amend the Colorado AI Act. All four bills would significantly revise the Colorado AI Act. Below, we identify those bills and provide a brief summary of each.
SB 17 – Focus on Transparency and Disclosures
Sponsored by Senate Majority Leader Robert Rodriguez and Representative Brianna Titone — two of the three sponsors of the Colorado AI Act — SB 17 repeals the Colorado AI Act and replaces it with the Colorado Artificial Intelligence Sunshine Act. As its name suggests, the bill is directed at providing disclosures regarding the use of certain types of AI.
Developer obligations:
Starting February 1, 2026, developers of algorithmic decision systems must provide deployers of such systems with (1) an analysis of whether and how any intended uses, or reasonably foreseeable uses or misuses, of the algorithmic decision system pose a known or reasonably foreseeable risk of violating the Colorado Consumer Protection Act or provisions of Colorado’s civil rights laws; (2) a description of steps taken by developers to mitigate such risks; (3) a statement describing the intended uses and reasonably foreseeable misuses of the algorithmic decision system; and (4) all other information necessary to allow the deployer to comply with the deployer’s obligation under the law.
Deployer obligations:
- Deployers of algorithmic decision systems must provide disclosures to individuals who are or will be affected by a “decision made, informed, or influenced by an algorithmic decision system, which decision has a material legal or similarly significant effect on the provision or denial to the individual of, or the cost or terms of (a) education enrollment or an education opportunity; (b) employment or employment opportunity; (c) a financial or lending service; (d) an essential government service; (e) a health-care service; (f) housing; (g) insurance; or (h) a legal service.”
- Deployers must also provide a notice to individuals prior to using an algorithmic decision system to make such a decision. The notice must identify certain information, such as the name of the developer and deployers, and nature of the decision. In addition, no later than 30 days after deploying an algorithmic decision system to make, inform, or influence a covered decision, deployers must provide individuals with a disclosure containing, among other things, the types of personal characteristics used in the decision system, a list of the 20 personal characteristics of the individual that most substantially influence the output (if applicable), and information on how an individual can exercise their right to access and correct data used by the system.
- Finally, any person that deploys a generative AI system intended to interact with individuals must disclose to individuals the fact that they are interacting with a generative AI system.
Individual rights:
The bill also creates a right for individuals to access “any personal characteristics . . . that were analyzed by, predicted by, input into, inferred by, or collected by an algorithmic decision system” and to challenge and correct any inaccurate data.
Enforcement:
The bill would be enforced through the Colorado Consumer Protection Act. It does not create a private right of action. Developers and deployers would be jointly and severally liable for violations, subject to certain conditions.
SB 12 – Repeal of the Colorado AI Act
This bill repeals and replaces the Colorado AI Act with the Technology-Neutral Anti-Discrimination Clarification Act of 2026. The bill states that “all prohibitions on discrimination contains in a statute of this state apply with full force and effect regardless of whether the challenged conduct is executed, facilitated, or scaled, in whole or in part, by means of a digital, automated, algorithmic, artificial intelligence, machine learning, or other technological process.” The bill does not define any of the relevant terms. Further, the bill states that creators, publishers, or distributors of technology are liable under this bill only “if that party intentionally engages in, directs, or knowingly aids the underlying discriminatory conduct.” The bill’s effective date is January 1, 2026.
HB 4 – Narrowing the Colorado AI Act and Effective Date Delay
This bill narrows the Colorado AI Act’s definition of “consequential decision” to only include decisions related to employment or public safety. The bill also changes the law’s effective date to August 1, 2027, and creates exemptions for businesses with fewer than 250 employees or less than $5 million in annual revenue, and for local governments with fewer than 100,000 residents.
HB 13 – Repeal of the Colorado AI Act and AI Interaction Disclosures
The bill repeals and replaces the Colorado AI Act with a bill that is perhaps most closely aligned with Utah’s AI disclosure law.
Specifically, on or after January 1, 2027, developers of AI systems capable of engaging in interactive, two-way communication with a consumer using natural language in text, voice, or video form, and in a manner that a reasonable consumer could mistake for human interaction, must disclose to the consumer, if requested, that they are interacting with an AI system and not a human.
Further, deployers of a “required disclosure artificial intelligence system” would be required to disclose to consumers, before the interaction, that they are interacting with such system. A “required disclosure artificial intelligence system” is an AI system that interacts with a consumer using text, audio, or visual communication to provide or deny (a) education enrolment or education accommodation; (b) an employment opportunity; (c) lending or credit services; (d) essential government services; (e) health care services; (f) housing, with respect to the purchase or renting of a residential property; (g) insurance; or (h) legal services.
These disclosures are not required if it would be obvious to a reasonable consumer that they are interacting with an AI system or a required disclosure AI system.
Those provisions are enforceable only by the attorney general.
Finally, the bill amends Colorado’s Anti-Discrimination Act to state that the design, development, or use of an AI system or a required disclosure AI system “may be the basis for liability under parts 3 to 8 of this article 34 to the extent that a violation of any such provisions can be established.”
