Colorado weakens AI regulation law, delays enforcement to 2027
Colorado's legislature passed a compromise bill Tuesday that significantly waters down the state's first AI regulation law and pushes its start date back by seven months. Senate Bill 189 passed the House 57-6 and the Senate 34-1, heading to Gov. Jared Polis for signature.
The original law, passed in 2024, would have required companies and government agencies to disclose how their AI systems make consequential decisions on hiring, loans, and housing. The new version requires only notification that AI is being used, plus an appeal mechanism for consumers.
Enforcement now begins January 2027 instead of June 2026. The legislature had already delayed the law once, pushing it from February to June, citing the need for more negotiation time.
Two years of industry pressure
Colorado became the first state to pass comprehensive AI regulation in 2024. Within days, Gov. Polis, Senate Majority Leader Robert Rodriguez, and Attorney General Phil Weiser signed a letter pledging to revisit the law, citing tech industry concerns.
Negotiations between businesses and consumer advocates failed during the regular 2024 session and a special legislative session in August. Polis then formed a working group of tech, business, labor, and legal leaders to develop a new framework.
Senate Bill 189 moved through the Capitol in less than two weeks with minimal changes.
Both sides claim partial victory
Rodriguez said the outcome reflected compromise: "Everybody lost and everybody won. We still have consumer protections. It's not as much as I would have liked. We're still the only state in the country to pass this legislation."
Brittany Morris Saunders, president of the Colorado Technology Association, called the bill "a more balanced path forward" that allows companies to innovate while protecting consumers.
The People's Alliance for Responsible Technology, a labor and consumer group coalition, also supported the measure. Kjersten Forseth, legislative director for AFL-CIO, said it represents "a good first step" but acknowledged more work remains to ensure transparency and accountability.
Concerns about transparency gaps
State Rep. Javier Mabrey, a Denver Democrat, voted for the bill but voiced frustration. He said consumers often don't understand how AI systems work when those systems decide who gets hired, housing, or school admission.
"I find it incredibly alarming that it took six months to get to this bill - a bill that does nowhere near enough to protect the people of Colorado," Mabrey said.
He supports allowing consumers to file lawsuits when they believe they've been harmed by AI, not just the attorney general. Mabrey vowed to push for stronger regulations in future legislative sessions.
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