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Colorado replaces 2024 AI law with new automated decision-making rules

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Why it matters

Colorado has enacted SB 26-189, a sweeping replacement of its 2024 AI Act that takes effect January 1, 2027. The new law repeals the prior comprehensive regime before it could fully take effect and narrows the regulatory focus to automated decision-making technology (ADMT) used to materially influence consequential decisions—such as hiring, housing, lending, health care, and government services. Rather than imposing broad system-level risk assessments, SB 26-189 emphasizes post-decision transparency and accountability, requiring developers and deployers of covered ADMT to provide consumers with notice, data access, correction rights, and meaningful human review.

Governor Jared Polis and the Colorado General Assembly enacted the law with enforcement authority vested in the Colorado Attorney General. The statute defines ADMT as technology that processes personal data to generate predictions, recommendations, classifications, rankings, scores, or similar outputs used to guide individual decisions. The practical compliance timeline includes a 30-day disclosure requirement after adverse outcomes and a 60-day cure period before enforcement action begins.

Attorneys advising employers, lenders, insurers, and other entities using AI in consequential decisions should treat January 1, 2027 as a hard deadline to audit their systems and implement the required transparency and human-review mechanisms. The shift from prescriptive risk assessment to case-by-case accountability reduces upfront compliance burden but increases exposure to post-deployment enforcement. The 60-day cure window provides limited remediation opportunity once the Attorney General identifies violations.

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