Colorado Senate guts AI regulation compromise, delays rules

Colorado’s first-in-the-nation artificial intelligence regulations face another significant delay after the state Senate dramatically gutted a compromise bill on Monday, opting instead to push back implementation of existing AI rules by several months. The collapse of negotiations highlights the ongoing tension between tech industry concerns and consumer protection advocates over how to regulate AI decision-making systems that affect everything from job applications to rental housing.

What you should know: Senate Majority Leader Robert Rodriguez stripped down the AI regulation bill, abandoning a carefully negotiated compromise in favor of a simple delay.

• The original 2024 AI law, set to take effect in February, would now be postponed until the end of June under Rodriguez’s proposal.
• “Overnight, the tech industry decided that they were so unhappy with the compromise that had been achieved by consumer-protection organizations, educators, labor and business that they would rather return to the (existing rules),” Rodriguez said.
• The House had already passed a competing measure that would delay the regulations until October 2026.

Why this matters: Colorado’s AI regulations are being watched nationally as a potential model for other states grappling with how to oversee artificial intelligence systems.

• The law aims to increase transparency around AI use in high-stakes decisions affecting Coloradans, including employment screening and housing applications.
• A key sticking point remains liability assignment between companies that use AI tools and the developers who create them.

The bigger picture: The AI regulation debate unfolded during a special legislative session primarily focused on addressing a $783 million budget deficit.

• Democratic lawmakers have already passed four bills expected to raise about $150 million through measures targeting high earners and closing tax loopholes.
• A fifth revenue measure could bring in another $100 million by allowing certain entities to sell tax credits at a discount.

What they’re saying: Representatives from both sides emphasize the need for careful consideration of liability issues.

• “A delay is the prudent thing to do,” said Rep. William Lindstedt, a Broomfield Democrat and sponsor of the House bill.
• “We need to figure out a way where school districts, hospitals and other deployers aren’t left holding the bag for these regulations,” Lindstedt added.
• “We need to ensure that all stakeholders involved in this legislation are held equally accountable when bad things happen,” he said.

What’s next: The Senate’s revised AI bill heads to the House for committee review and potential floor votes, with a final decision possible as early as Tuesday.