Colorado Releases Proposed Framework for AI Act Replacement

In 2024, Colorado implemented the Colorado Artificial Intelligence Act, a comprehensive regulation aiming to control AI usage, but it has received significant scrutiny.
To address concerns, the Colorado AI Policy Work Group released a proposal to replace much of the original AI Act with a more streamlined regime on March 17, 2026. This proposal is backed by Governor Jared Polis.
The proposal redefines the scope of regulation from “high-risk artificial intelligence systems” to certain “automated decision-making tools” used in “consequential decisions” affecting things like employment opportunities.
The original AI Act required employers to implement several burdensome obligations such as risk management programs, assessments, and reports on algorithmic discrimination, while the proposal aims to focus on transparency and notice.
The proposal would necessitate pre-use notice for covered ADMT and post-adverse-outcome disclosures outlining the decision’s process and inputs, the option for human review, and the ways to modify personal data.
Additionally, it would remove some obligations, like risk management policies, impact assessments, and annual reviews.
Currently, this is just a proposal. If enacted, it would delay the law’s effective date from June 30, 2026, to January 1, 2027. Nevertheless, employers should prepare for compliance with the original AI Act on June 30, 2026, in case the proposal isn’t adopted.

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