On the last day of the legislative meeting, there was Colorado’s continued efforts to put guardrails on how to use AI for some of the most consequential decisions.
Lawmakers are waiting for a bill that will improve groundbreaking AI regulations passed last year. But when the new law was finally introduced late last week, it quickly became clear that it faced important opposition. On Monday, the lead sponsor asked his colleagues to vote after the initial committee hearing.
Denver’s Senate Majority Leader Robert Rodriguez said he worked behind the scenes on Senate Bill 318 for months. He sought to address the concerns that the industry and Gov. Jared Police has with current law.
“This bill has been improved in several places,” he said. “This bill was moving in the direction we needed for policy, and it’s a shame we couldn’t get it at the finish line.”
However, the opposition said that despite Rodriguez’s proposed changes, the underlying policy would still be ineffective and ambiguous, and would curb innovation with courageous requirements.
A few days before the hearing, Rodriguez told CPR News that he would kill the bill if he felt there was a risk of fixing it in a way his colleagues didn’t support.
Bold steps in AI policy leave many unanswered questions
Last year, Colorado became the country’s first state to post rules on how businesses and governments use AI to assess people for university admissions, employment, loans, insurance contracts and more.
The new law requires businesses and some government agencies to notify people when AI systems are being used to make decisions. And it allows people to file an appeal and modify the data or file a complaint if they believe the technology has been unfairly treated. It also sets up a process for the Attorney General’s office to investigate bad actors.
Even if they passed the law last year, lawmakers saw it as just a starting point. They set the idea of delaying the implementation of the policy until February 2026, setting up a task force to address the issue during that time, and passing revisions to this session to the policy.
When he signed the original bill, Police asked lawmakers to focus regulations on software developers who create AI systems, not small businesses that use them. Police also warned that using the law it could be used to target people who employ AI, even if their application is not intentionally discriminatory.
“I want to clarify my goal of ensuring Colorado remains home to innovative technology. Consumers have full access to important AI-based products,” he writes.
Police, Rodriguez and Attorney General Phil Weiser also signed a letter in June to amend the law to protect consumers, recognize Colorado’s leadership in the AI sector, “well before the February 2026 deadline for the implementation of the law,” and to minimize unintended consequences.
Jesse Paul/Colorado Sun
“We believe this collaboration will support the thriving technology sector in Colorado that places consumers and innovation first,” they write.
But so far, it doesn’t seem like it was.
Revisions cannot beat opponents
Bill Rodriguez, introduced last week, included a 36-page adjustment to existing law. We tried to define which types of AI systems were covered and which types were not, but we created a Waiver for smaller AI developers and eliminated some of the reporting requirements for developers, including many others. In addition, the implementation of the law has been returned to January 1, 2027.
However, these changes did not soften the fundamental opposition of the business community.
“This is very irrational and very unenforceable,” said Bryan Leach, entrepreneur and CEO and founder of Denver-based Ibotta. Last year, the company unveiled the largest IPO in Colorado history. Leach said his company would not be affected immediately, but he called AI policy the most anti-business bill he’d seen in 20 years.
“We’re less than 2% of (Colorado) people, but we’re the only ones who regulate AI. It’s as if Colorado tried to regulate the internet in 1994, thwarting growth and creativity,” Leach told CPR News.
Opponents note that similar attempts to regulate AI have failed in states across the country.
“We have other states that tried to follow the lawsuit and they either were postponed indefinitely or their governor rejected them. That’s a huge concern for us in Colorado’s competitiveness.”
But Rodriguez said these other efforts have failed as the tech industry has never been regulated before and fight like a bully to prevent it from happening.
He compares the industry with kids running with scissors. “It’s a very powerful individual venture capital that has a lot of power in this state and this political situation,” he told CPR News.
He said he feels responsible as a lawmaker in the only state that he doesn’t want to model a country unless he passes this kind of AI regulations and truly protects consumers.
Rodriguez said the polls show people’s distrust and aversion to AI is on the rise.
“It’s about to get their work started. It’s determining their lives. There are places where people don’t trust it. And the core of trust is transparency and knowledge. And it doesn’t seem like the industry is still aware of it.”
What happens next?
By killing this week’s bill, Rodriguez will make sure the 2024 law is more likely to take effect without amendments early next year.
But some of the state’s senior Colorado officials are urging lawmakers to find a way to push it back. After Monday’s hearing, Gov. Police, Attorney General Phil Weiser, Denver Mayor Mike Johnston, and several Democrats members of the state legislature delegation sent letters calling for lawmakers to introduce new bills before they can be postponed to extend the deadline until January 2027.
Jesse Paul, Colorado Sun
“It is clear that the time remaining at the 2025 legislative conference will require more time to continue the critical stakeholder work to ensure that Colorado’s Artificial Intelligence Regulation Act is effective and implementable,” the letter states.
However, options for the last day of the session are limited. The Colorado constitution requires a minimum of three days to pass an invoice. That means my clock was exhausted on Monday night.
Another remaining option is to find an invoice on a closer topic, try to fix it and add a section that pushes back the implementation deadline, but such a Hail Mary Move seems unlikely.
Some members of the industry are hoping that the governor will use special sessions to delay the implementation of the law, but that will also be an extraordinary move.
Companies wonder what the law means to them
Some of the biggest concerns about Colorado laws that were not featured in Rodriguez’s bill are that AI developers must clarify how the system works internally. They also worry that the law is not accurate enough about what AI involvement it applies to in the decisions it involves.
Jon Nordmark is CEO of Iterate.AI, based in Highlands Ranch. Both of his companies provide AI to large companies such as Ulta Beauty and Elf Cosmetics, and use technology internally for employment and more.
For example, he says that his company currently has four openings and 4,000 applicants. AI is important to defeat that pool on a manageable number of related resumes.
“If the law is written today, if any of those candidates believe they are discriminated against, they can appeal to us about why they were interviewed or not using AI to choose who to hire, or they played that decision in some way, so they can appeal to us about why they were interviewed or not hired.”
In that scenario, Nordmark said it is not clear how his company will retrieve data to explain the processes of AI systems. But that’s exactly why supporters of the bill say it’s necessary.
“It is important for workers and consumers to understand when and how AI systems will be used in decisions that could change the course of their lives and careers,” says Alexandra Reeve Givens, president of the Center for Democracy Technology.
Reeve Givens praised Rodriguez for setting his new bill aside to protect the underlying policies.
“Senator Rodriguez and his colleagues at the General Assembly did the right thing by refusing to eliminate or delay the minimum protections that Colorado workers and consumers should be willing to accept,” Reeve Givens said.
Grace Gedye is an AI policy analyst, including consumer reports, and served on the state’s task force that discussed potential changes to AI law. She said there are still some loopholes from a consumer perspective, but overall, the law addresses issues that are important to consumers. She focused on her and others attending countless meetings to hear the concerns of tech groups and seeking compromises. She said the industry doesn’t need more time.
“They had a lot of time and I was happy to see that further delay discussions didn’t win that day.”
