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Signed into law by Governor Jared Polis
webA legal update from Seyfarth law firm analyzing Colorado's landmark AI governance law, relevant to those tracking AI policy and the patchwork of U.S. state-level AI regulation efforts.
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Summary
Colorado became the first U.S. state to enact broad AI regulation when Governor Polis signed SB 24-205 on May 17, 2024, covering employers' use of AI in 'consequential decisions' including employment. The law requires impact assessments, consumer disclosures, and opt-out notifications, taking effect February 1, 2026. Notably, the Governor signed it 'with reservations,' urging federal preemption and future amendments.
Key Points
- •Colorado SB 24-205 is the first broad U.S. state law regulating AI use in consequential decisions, including employment, effective February 1, 2026.
- •Requires AI developers and deployers to conduct impact assessments, provide consumer-facing disclosures, and offer opt-out notifications for Colorado residents.
- •Governor Polis signed with reservations, warning the law could hamper innovation and calling for federal preemption to avoid a state-level regulatory patchwork.
- •Business groups lobbied for a veto, reflecting industry tension with emerging AI governance frameworks at the state level.
- •The law incentivizes AI risk management practices that have been discussed by regulators at federal, state, and international levels.
Cited by 1 page
| Page | Type | Quality |
|---|---|---|
| Colorado Artificial Intelligence Act | Policy | 53.0 |
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Legal Update
May 18, 2024
# Colorado Governor Signs Broad AI Bill Regulating Employment Decisions
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_**Seyfarth Synopsis:** On May 17, 2024, Colorado Governor Jared Poils signed Colorado SB 24-205, making Colorado the first state to enact broad legislation regulating employers’ use of AI to make “consequential decisions.” Colorado SB 24-205 broadly covers a wide range of AI applications, including employment, and incentivizes AI risk management practices that have long been the subject of discussion by regulators at the federal, state, and international level. For many applications, the bill requires impact assessments, consumer-facing disclosures, and notifications regarding Colorado residents’ ability to opt-out._
_This Seyfarth Client Update has been edited following its publication to reflect Governor Polis’ signing of Colorado SB 205._
**Colorado SB 24-205 Was Signed Into Law on May 17 Over Business Group Objections**
Governor Polis signed Colorado SB 24-205, “ [Concerning Consumer Protections in Interactions With Artificial Intelligence Systems](https://leg.colorado.gov/bills/sb24-205), on May 17, 2024 “with reservations.” His [signing statement](https://drive.google.com/file/d/1i2cA3IG93VViNbzXu9LPgbTrZGqhyRgM/view) acknowledges that SB 205 “creates a complex compliance regime for all developers and deployers of AI doing business in Colorado... This bill is among the first in the country to attempt to regulate the burgeoning artificial intelligence industry on such a scale.”
In his signing statement, Governor Polis further expresses concern “about the impact this law may have on an industry that is fueling critical technological advancements” and observed how regulation – like SB205 – “applied at the state level in a patchwork across the country can have the effect to tamper innovation and deter competition in an open market”.
Accordingly, in his signing statement, Governor Polis encourages the bill's sponsors “to significantly improve” their approach before SB 205 takes effect, and specifically calls on the federal government to enact federal legislation that would preempt the bill he just signed, replacing it “with a needed cohesive federal approach.” He further called on C
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