DENVER — A revised Colorado law regulating the use of automated decision-making technology in key consumer decisions is set to take effect on January 1, 2027, after lawmakers replaced an earlier version of the state’s pioneering artificial intelligence legislation that had been scheduled for June 30, 2026, state officials said.
Governor Jared Polis signed Senate Bill 26-189 on May 14, 2026, repealing and replacing the 2024 Colorado AI Act (Senate Bill 24-205). The new measure shifts focus to transparency and consumer protections for automated decision-making technology (ADMT) used in consequential decisions, state records show.
The original law, the first comprehensive state AI regulation in the U.S., required developers and deployers of high-risk AI systems to take reasonable care to prevent algorithmic discrimination in areas such as employment, housing, credit and healthcare. It faced industry concerns and was delayed multiple times before the legislature opted for a narrower approach.
Under the revised law, covered ADMT includes systems that materially influence consequential decisions in domains including employment, education, housing, financial services, insurance and healthcare. Obligations include providing advance notice to consumers when such technology is used, disclosures following adverse actions, and record-keeping requirements for at least three years, according to legislative summaries.
“Colorado continues to lead in responsible AI governance while addressing practical concerns raised by businesses and stakeholders,” Governor Polis said in a statement following the signing.
The Colorado Attorney General’s office is responsible for adopting implementing rules before the effective date. The law provides no private right of action and enforcement rests with the attorney general, with a cure period for certain violations until 2030.
Business groups welcomed the revisions as a more balanced framework compared to the original bill’s broader risk management and impact assessment requirements. Consumer advocates expressed support for retained protections around transparency and the right to correct inaccurate data used in automated decisions.
The changes reflect ongoing national debates over AI regulation, with Colorado’s approach influencing discussions in other states. Several companies and organizations had raised concerns about compliance burdens under the prior version.
As of Tuesday, the revised law remains on track for implementation on January 1, 2027. The attorney general’s office has not yet finalized rules, and details on enforcement priorities are expected in the coming months. Companies using relevant technologies are advised to review the statute and prepare for compliance obligations.
