Colorado enacts scaled-back AI law

Colorado Gov. Jared Polis signed into a law a bill regulating the use of “automated decision-making technology” (ADMT) to make consequential decisions that affect employment, educational opportunities and a number of other domains.

The bill, S.B. 189, repeals and amends AI restrictions enacted by another law, S.B. 205, that was slated to take effect June 30, 2026. However, S.B. 205 has been subject to legal challenge, and on April 27, 2026, a federal court issued a temporary restraining order that blocks enforcement while litigation is pending.

While S.B. 205 required users of AI systems to take various steps to prevent algorithmic discrimination, S.B. 189 primarily focuses on notice and disclosure.

Under S.B. 189, organizations using an ADMT to materially influence a consequential decision – such as a decision impacting an employment opportunity – will be required to provide clear and conspicuous notice. If the ADMT-influenced decision leads to an adverse outcome, the organization must provide the affected individual with:

• A plain language description of the decision and the role the ADMT played;
• Instructions and a simple process to request additional information about the ADMT and the data it used; and
• An explanation of the individual’s right to correct inaccurate data and request meaningful human review and reconsideration of the decision.

The law defines automated decision-making technology as technology that processes personal data and uses computation to generation output, including predictions, recommendations, classifications, rankings, scores or other information that is used to make, guide or assist a decision or determination concerning an individual.

A number of common technology tools – such as anti-virus software, databases, spell-checking, spam filtering and spreadsheets that require human analysis – are excluded from the definition of an ADMT. The law also excludes tools used solely to summarize information for human review, as well as certain chatbots and similar tools that are not used for consequential decisions and are subject to an acceptable use policy.

The law takes effect January 1, 2027.