Colo. Gov signs AI regulation bill

It was passed on the final day of the legislative session.
Colorado Senate Majority Leader Robert Rodriguez (D). (Courtesy of Colorado Senate Democrats)

Colorado Gov. Jared Polis (D) has signed the nation’s most sweeping artificial intelligence regulation bill that could provide a framework for other states to emulate.

In a letter to members of the General Assembly, Polis said he was approving the law in hopes it would further a national conversation about AI regulation, but said he was doing so “with reservations” and urged lawmakers to “significantly improve” on the legislation before it takes effect in 2026.

“This law creates a complex compliance regime for all developers and deployers of AI doing business in Colorado, with narrow exceptions for small deployers,” Polis wrote. “I am concerned about the impact this law may have on an industry that is fueling critical technological advancements across our state for consumers and enterprises alike.”

Polis, a former entrepreneur, also called for federal AI regulation to avoid a patchwork of state laws that could “tamper innovation and deter competition in an open market.”

Workday, a finance and human resources software vendor, congratulated Polis for signing the bill which it called “a critical first step with which we hope other states align for a much-needed common approach to AI regulation.”

The legislation, shepherded by Senate Majority Leader Robert Rodriguez (D), passed at the last possible moment before Colorado legislators adjourned for the year, and just one day after a similar bill in Connecticut died following a veto threat from Gov. New Lamont (D).

The Colorado bill positions the state to take the lead on establishing comprehensive rules of the road for the deployment of AI systems that make consequential decisions about people’s lives.

“AI systems are evolving faster than we can write and pass policy on them, which is why this bill was so badly needed,” Rodriguez told Pluribus News after the vote last week. “I am extremely proud to get this important bill over the finish line. It will establish foundational guardrails for developers utilizing high risk AI systems with the goal of reducing algorithmic discrimination and creating a safer user experience for consumers.”

Rodriguez’s bill borrowed heavily from the Connecticut version authored by Sen. James Maroney (D) who set out this year to establish a national template for AI regulation, similar to what has emerged for data privacy. Maroney’s bill was the product of a months-long process that involved stakeholder input and resulted in a 37-page bill that was introduced in February.

Read more: Sweeping AI regulation proposed in Connecticut

Maroney’s bill was a priority for Senate Democrats, and the Senate ultimatly passed a slimmed-down version on a party-line vote last month. But the Connecticut House did not take it up for a vote after Lamont voiced concerns that it could stymie innovation and put Connecticut at a competitive disadvantage.

“It’s disappointing that Connecticut has given up its opportunity to lead in this rapidly evolving space,” Maroney told Pluribus News last week, after it became clear his bill would not get a vote in the Connecticut House.

Even as Maroney’s bill stalled out, the Colorado version maintained momentum as the legislative session wound down.

Maroney and Rodriguez, who got to know each other while working on data privacy issues, have established themselves as leaders on AI regulation in the states. Both served on the steering committee of a bipartisan AI working group that brought together dozens of state legislators from around the country last fall. The group convened to learn more about the fast-moving technology, come up with ideas for legislation, and develop common definitions.

The legislation seeks to protect consumers from algorithmic discrimination when AI is used to make life-altering decisions, such as about a person’s employment, education or health care. It also included consumer rights provisions such as the right to know when AI is being used and the right to appeal adverse decisions.

“Many algorithms have biases baked in and can easily result in discriminatory outcomes when it comes to housing applications, hiring practices, and more,” Rodriguez said.

Before Polis’s office announced he had signed the legislation on Friday, officials had not indicated how he would act. His office noted that key provisions of the bill would take effect in February 2026, which would give the legislature time to make changes to the law next session.

Outside observers said the bill will likely serve as a guidepost for other states.

The bill “is a watershed moment in the development of America’s approach to AI policy,” said Tatiana Rice, deputy director for U.S. legislation for the Future of Privacy Forum. “The law focuses on the highest-risk uses of AI that pose risks of algorithmic discrimination in consequential decisions and creates context-appropriate guardrails that recognize uniquely situated market participants.”

In the aftermath of its passage, both industry and consumer groups expressed some hesitation about the Colorado measure.

In a statement, Craig Albright, senior vice president of U.S. government relations at The Software Alliance, an industry trade group, said “aspects of the legislation that do not reflect the roles of different businesses within the AI value chain.”

Albright urged Congress to pass federal legislation and said, absent that, “state legislative leaders should continue to emphasize consistency and workability in AI policy.”

Grace Gedye, a policy analyst at Consumer Reports, called the Colorado bill “a step in the right direction” but said “it will need to be aggressively enforced to ensure that companies comply, and to deter bad faith interpretations.”

Rodriguez called the legislation a “first step” and said that as AI evolves so will legislation.

This story was updated to reflect Gov. Polis’s signature and to include his comments about the legislation.