Colorado narrows AI bias law, replaces mandates with notices

Colorado lawmakers introduced Senate Bill 26-189 to repeal the state’s 2024 AI bias law and replace it with a notice-based framework that requires companies to disclose when automated decision tools are used, provide explanations on request after an adverse outcome and offer limited human review. The proposal removes most pre-deployment testing and bias-mitigation duties in the earlier law.

The 2024 law, Senate Bill 24-205, was signed by Gov. Jared Polis and targeted so-called high-risk AI systems. It would have required companies to test systems for bias, reduce discrimination risks and explain how AI influenced decisions in employment, housing, health care and insurance. Those requirements were scheduled to take effect in 2026 but implementation was delayed amid industry pushback and legal and political pressure.

Under SB 26-189, companies would have to notify people when automated decision-making tools are used, provide more detailed explanations if someone receives an unfavorable outcome and requests one, and offer the option of human review. The bill allows firms to limit human review based on what they consider “commercially reasonable.”

State Senate Majority Leader Robert Rodriguez called the bill “more of a notice bill” and added it “strikes an appropriate balance of protecting consumers while not being onerous.” Senate President James Coleman, a co-sponsor, described the legislation as the product of ongoing efforts to refine Colorado’s approach to regulating AI.

Researchers and advocacy groups have argued that requiring companies to assess and mitigate risks before deployment is necessary to prevent systemic bias. Business groups have warned that strict, risk-based rules could slow innovation and create significant compliance costs. Colorado’s proposal aligns with an approach that emphasizes transparency and remedies after problems are identified rather than mandatory pre-deployment controls.

The bill is scheduled for a committee hearing and must clear both chambers before the legislative session ends on May 13. Observers in the United States and abroad are watching Colorado as an early test case for state-level AI policy after the state initially set an ambitious standard and then narrowed those requirements.