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Governor Polis signs SB 24-205
webColorado SB 24-205, signed in May 2024, is a landmark US state AI regulation; this Venable legal briefing is a practical reference for understanding compliance obligations and the law's scope for AI developers and deployers.
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Summary
This Venable legal analysis covers Colorado's SB 24-205, the first comprehensive state-level AI law in the US targeting high-risk AI systems. It outlines key obligations for developers and deployers of AI, including risk assessments, transparency requirements, and anti-discrimination protections for consumers.
Key Points
- •Colorado SB 24-205 is the first US state law imposing broad duties on developers and deployers of 'high-risk' AI systems affecting consequential decisions.
- •Covered entities must conduct impact assessments, disclose AI use to consumers, and implement risk management programs.
- •The law targets AI used in high-stakes domains such as employment, housing, education, lending, insurance, and healthcare.
- •Consumers gain rights to appeal automated decisions and receive explanations for AI-driven outcomes affecting them.
- •Developers bear responsibility for disclosing known risks to deployers, creating a shared accountability framework across the AI supply chain.
Cited by 1 page
| Page | Type | Quality |
|---|---|---|
| Colorado Artificial Intelligence Act | Policy | 53.0 |
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Colorado's Landmark AI Law: Essential Insights for Businesses | Insights | Venable LLP
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May 30, 2024
Heather West
Daniel S. Wolf
Emily F. Keimig
Morenike Oyebade
Colorado's Landmark AI Law: Essential Insights for Businesses
4
min
On May 17, 2024, Governor Jared Polis signed into law Colorado Senate Bill 24-205 (SB205) , pioneering a comprehensive regulatory framework for artificial intelligence (AI) systems. This landmark legislation, among the first of its kind in the United States, imposes rigorous standards on businesses employing "high-risk" AI tools in critical sectors like employment, housing, finance, education, and healthcare. In his signing statement, Governor Polis expressed concerns about potential impacts on technological innovation, calling for further refinement of the bill's provisions and advocating for a cohesive federal approach to AI regulation. Understanding this new law is crucial for entities operating in Colorado looking to minimize their legal risk and promote compliance.
Key Provisions of SB205
Under this new law, entities using high-risk AI systems must establish and implement risk management policies, conduct thorough impact assessments, and provide specific notices to consumers by February 1, 2026. These new requirements are intended to promote transparency, accountability, and equity in the use of AI technology by companies doing business in the state of Colorado.
The law grants exclusive enforcement authority to the Colorado attorney general, categorizing violations as unfair and deceptive trade practices. The attorney general is also authorized to promulgate rules for implementation and enforcement of the law's provisions, including the design and content of required consumer notices.
This approach to AI governance reflects broader regulatory trends emerging nationally, and similar legislation has been proposed in other states this year, including California, Connecticut, and Virginia.
What Is a High-Risk AI System?
The new law broadly defines a "high-risk artificial intelligence system" as one that "makes, or is a substantial factor in making, a consequential decision," and a "consequential decision" is defined as one having a "material legal or similarly significant effect" on the availability or cost of a variety of different services available to consumers, including housing, financial, employment, or government services.
New Obligations for Developers and Deployers of AI
SB205 also imposes new obligations on persons or organizations that
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