After months of closed-door negotiations over changes to a 2024 law that aims to protect consumers from discrimination by artificial intelligence systems, top Democrats in the Colorado Legislature in the final days of the legislative session are backing a proposal to dramatically narrow the law’s scope.

Senate Bill 26-189, introduced Friday evening, closely resembles a draft measure released earlier this year by an AI policy group convened by Governor Jared Polis on the recommendation of the Colorado Chamber of Commerce.

It would largely scrap the legal framework of Senate Bill 24-205, a first-in-the-nation set of regulations that aims to protect consumers from bias in AI-powered decisions relating to employment, housing, healthcare, insurance and more. SB-205’s provisions, which are set to take effect in June, require AI companies and businesses that deploy their technology to conduct risk assessments, take reasonable steps to protect users from discrimination, and publish detailed information about how AI is used in their decision-making processes.

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SB-189 would repeal and rewrite the law almost entirely, replacing SB-205’s broad references to “high-risk artificial intelligence systems” and “algorithmic discrimination” with a new definition of “automated decision-making technology,” or ADMT. The affirmative “duties” placed on AI developers and businesses to take steps to prevent such discrimination would be scrapped.

Businesses deploying AI technology for “consequential decisions” would no longer be required to provide upfront disclosure of detailed information about the purpose of the AI-powered system or the “nature, source and extent” of the personal information being processed.

Instead, SB-189 would require a simple disclosure that ADMT is being used, while requiring deployers to provide more detailed information only if requested by a consumer within 30 days of a “consequential decision that results in an adverse outcome.” In such cases, businesses would also be required to provide, on request, information pertaining to an appeals process, including the opportunity to correct inaccurate personal data and obtain “meaningful human review … to the extent commercially reasonable.”

In a press release late Friday, Colorado Senate President James Coleman, a Denver Democrat, said SB-189 “reflects years of work to find the right policy framework.” Coleman is sponsoring the bill alongside Senate Majority Leader Robert Rodriguez, a Denver Democrat, who sponsored SB-205 two years ago.

“If someone is denied housing or a job, loses their healthcare, or sees their insurance rates mysteriously skyrocket at the hands of automated technology, they deserve to know what criteria went into that decision and to have an opportunity to correct mistakes,” Rodriguez said in a statement. “This bill strikes an appropriate balance of protecting consumers while not being onerous on developers or the businesses who use AI technology.”

Task force recommendations

AI companies and Colorado’s business community have have bitterly opposed SB-205 since its inception, and Colorado Attorney General Phil Weiser agreed last month to suspend its enforcement as a result of a lawsuit brought against the law by Elon Musk’s xAI and the U.S. Department of Justice.

Polis signed the bill into law in May 2024, but issued a signing statement at the time expressing “reservations” about the law’s potential “to tamper innovation and deter competition in an open market.”

The bill was initially set to take effect in February 2026. But after negotiations on revisions to the law broke down a year ago, Polis, Weiser and four other top Colorado Democrats — U.S. Senator Michael Bennet, U.S. Representatives Joe Neguse and Brittany Pettersen, and Denver Mayor Mike Johnston — successfully pressured the Legislature into delaying the law’s effective date to June.

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In October 2025, Polis appointed an 18-member task force to draft recommendations for revising the law. Its meetings were not fully open to the public, and its format was similar to one previously proposed by the Colorado Chamber of Commerce, The Denver Post reported last year. When the group released its proposal in March, the governor applauded the group’s “unanimous agreement on AI policy to protect consumers and support innovation in our state.”

“I look forward to supporting the recommended framework as legislation moves through the process, and commend the Colorado AI Policy Work Group for their efforts to get us here,” Polis said at the time.

The People’s Alliance for Responsible Technology, a coalition of progressive and labor groups, said in a statement Friday that it was “cautiously optimistic” about the compromise bill.

“We’ll keep our eye on required disclosures to workers, patients and consumers to make sure that they’re protected when AI makes important decisions about their future,” Dennis Dougherty, a PART member and director of the Colorado AFL-CIO. “Coloradans deserve transparency and accountability when Big Tech affects our lives.”

SB-189 will be heard first by the Senate Business, Labor and Technology Committee on Tuesday. The General Assembly is scheduled to conclude its 120-day legislative session on May 13.