As Colorado lawmakers return to the Capitol to fill a substantial budget hole this week, a second — but similarly complicated — fight is set to unfold over AI.
Lawmakers are preparing four bills to amend Colorado’s first-in-the-nation artificial intelligence regulations, which seek to prevent discrimination when companies use AI to make various decisions.
They are part of a law that has yet to take effect and has faced significant industry pushback. When Gov. Jared Polis called the special session that starts Thursday, a $783 million state budget gap opened by the federal tax bill was the main motivation. But he also charged lawmakers with considering changes to the AI law.
And while Democratic lawmakers who constitute the legislative majority are largely aligned on how to fill the budget hole, there’s significantly less agreement on how to answer Polis’ call to amend the AI regulations.
Two of the new bills, each backed primarily by Democrats, are the likeliest to advance. But their aims largely run counter to one another: One bill is accused of doing too much and implementing unworkable rules. The other is criticized for doing too little to protect consumers and to regulate a burgeoning — and affluent — industry.
Given that they start in opposite chambers and are backed by different power centers in the Capitol, they’re likely to collide in the coming multiday session.
“It’s a mess,” said David Seligman, an attorney general candidate who runs the nonprofit law firm Towards Justice.
Seligman is supporting a bill that would slim down the already-adopted regulations, which were passed in 2024 and will otherwise come into effect in February. Backed by the initial law’s sponsors, the new proposal would still require AI developers and the companies that use their technology to inform consumers of AI’s presence in a variety of services, ranging from chatbots to job and university applications and health care records. It would give people affected by those AI services the ability to challenge and correct information provided to an employer or a potential landlord.
A company or government service that uses the technology to screen applicants or make other decisions would also be required to disclose characteristics that influenced an AI-driven decision to a person affected by it.
“That’s really what the bottom line is: It’s about protecting citizens from the unforeseen and making sure developers are thinking about what their product is going to do — and having some plans about how they can figure out how to remedy that for that person,” said Rep. Brianna Titone, an Arvada Democrat who’s set to sponsor the bill with the backing of progressive lawmakers and allied groups.
The competing bill, which is backed by more moderate Democrats and at least one Republican, similarly would require that people be notified when they’re interacting with or being screened by AI. It would also make clear that AI developers are subject to the state’s antidiscrimination and consumer-protection laws.
Under its provisions, only the state’s attorney general — not individual users — could sue either tech companies or the agencies and companies that use their technology for violating the consumer-protection law.
Rep. William Lindstedt, a Broomfield Democrat, said the goal was to provide transparency while ensuring that companies that use AI for various services aren’t immediately held liable for problems that come from the underlying tech.
“That’s what we’re trying to do: Find a middle ground that protects consumers and also protects our innovative economy here in Colorado,” he said. “I think if you took the bill that I have on the page right now and compared it to every other state, it would still be one of the most stringent, strongest consumer protections in the country.”
Scrambles
The brewing policy scuffle is the latest turn in an unhappy 15-month honeymoon for the state’s marquee AI regulations.
Even as he signed them into law, Polis called for the guardrails to be reformed amid industry critiques that they were unworkable. A task force then met for months to find a path forward, culminating in legislation introduced earlier this year during the regular session.
But after opponents of the regulations tried to further clip them, Sen. Robert Rodriguez, the Senate’s majority leader and the regulations’ primary backer, killed the reform bill entirely.
That prompted a last-minute scramble to delay the regulations’ February start date so that negotiations could restart. The effort, advanced by Lindstedt, then collapsed under the weight of a late-night filibuster by Titone.
Further scrambling ensued. After Rodriguez euthanized his bill, Polis and five other Democrats — including Denver Mayor Mike Johnston and U.S. Sen. Michael Bennet — sent the legislature a letter to “implore” them to delay the regulations.
In July, a coalition that included school boards, airlines and tech companies sent Polis a letter asking him to include reform of the regulations in his coming special session announcement.
Battle lines
Now, the debate returns as lawmakers get ready for what’s likely to be an already-bruising fight over state revenues.
And the clock is ticking: The regulations are alive and well in Colorado’s statute books, and they take effect in six months.
Titone and supporters of her bill have said Lindstedt’s approach is pro-tech fluff. The state’s consumer-protection laws already cover AI, they argue, and that bill would limit consumers’ ability to file lawsuits or know if they’ve been discriminated against.
But Lindstedt and supporters of his approach argue that while clarity and oversight are needed, the scale of the other bill’s regulations would significantly stifle the burgeoning AI industry’s ability to operate — or for its systems to be used — in the state. Requiring companies to list the characteristics assessed by AI and send them to each individual consumer would be “nearly impossible for many AI systems,” according to a fact sheet prepared by lobbyists supporting Lindstedt’s bill.
Titone’s bill also would place liability for violations of state law on both tech companies and the services or government agencies that use AI.
Lindstedt, who said he’s working with the constellation of groups that urged Polis to reform the law, hopes to reach a deal with Titone and Rodriguez.
But doing so may be tough. One side’s sore spot — the liability provision, for instance — is the other’s non-negotiable.
The Colorado Chamber of Commerce declined to comment Tuesday ahead of internal deliberations over the legislation. The Colorado Technology Association’s president and CEO, Brittany Morris Saunders, struck a similarly even tone in an email, writing that her group felt “progress has been made” and that it looked “forward to continued conversations” with legislators this week.
For his part, Polis was noncommittal about which approach he preferred Tuesday.
But his office has engaged in discussions with the supporters of Lindstedt’s bill, according to officials involved in those negotiations. The governor supported U.S. Senate Republicans’ failed attempt to add a provision to the tax bill that would have blocked states from regulating AI for the next decade. He’s also repeatedly called on state legislators to amend the bill he signed into law last year.
“I will work with anyone to find the right path forward on AI for Colorado — including the development of a new policy framework that addresses bias while also spurring innovation, a delay of implementation, or some combination,” Polis wrote in a statement Tuesday. “There is clear motivation in the legislature to take action now to protect consumers and promote innovation, all without creating new costs for the state or unworkable burdens for Colorado businesses and local governments.”
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