Colorado signs AI and regulatory reform bills to boost business climate

Colorado lawmakers and business leaders on Thursday highlighted two new laws aimed at shaping oversight of artificial intelligence and reducing state regulatory burdens, with supporters saying the measures are intended to support innovation and improve the state’s business climate.

One of the bills, SB26-189, creates new requirements and safeguards around the use of automated decision-making technology in areas such as housing, employment, health care and insurance. Supporters said the law is intended to balance consumer protections with flexibility for businesses developing or using AI tools.

“This is a big step in the right direction for Colorado, and a model for the rest of the country,” Gov. Jared Polis said in a statement, adding that replacing the previous law before it took effect would help support innovation and entrepreneurship in the state.

Senate Majority Leader Robert Rodriguez, D-Denver, said the legislation is designed to ensure transparency when AI systems are used in consequential decisions affecting consumers. He said the law gives residents a chance to correct errors if automated systems affect access to housing, jobs, health care or insurance.

Lawmakers also pointed to the measure as part of Colorado’s broader push to position itself as a hub for technology and entrepreneurship while setting standards for AI governance.

Polis also signed SB26-137, which requires the Colorado Department of Regulatory Agencies to review state agency rules every five years. Supporters said the law is intended to reduce outdated or duplicative regulations and improve government accountability.

Sen. Cleave Simpson said the measure would create a more predictable regulatory environment for businesses and communities across the state. Senate President James Coleman said the law would require agencies to assess which regulations remain effective and where rules could be streamlined.

House Minority Leader Jarvis Caldwell said the legislation would require agencies to justify existing rules and eliminate regulations that no longer provide a public benefit.