The Colorado AI Policy Work Group Proposes an Updated Framework to Replace the Colorado AI Act
On March 17, 2026, the Colorado AI Policy Work Group, with strong support from Governor Jared Polis, proposed a new artificial intelligence (AI) legal framework to replace the Colorado Concerning Consumer Protections in Interactions with AI Systems (Colorado AI Act). This proposed framework, entitled Concerning the Use of Automated Decision Making Technology in Consequential Decisions (the Proposed ADMT Framework), is a complete rewrite of the Colorado AI Act, shifting focus from strict requirements to more consumer-centric obligations.
Background on the Colorado AI Act
The Colorado AI Act is noted for being the most comprehensive AI legislation in the United States. It aligns with the EU AI Act and imposes obligations on developers and deployers of AI systems classified as “high risk.” Initially set to go into effect on February 1, 2026, the law’s effective date was postponed to June 30, 2026.
Key Changes in the Proposed ADMT Framework
The Proposed ADMT Framework modifies existing obligations to prioritize transparency, recordkeeping, and consumer rights, moving away from the previous requirements such as reporting algorithmic discrimination and conducting AI impact assessments. The new framework mirrors the regulations commonly seen under comprehensive data privacy laws.
Updates to Applicable Systems
Under the Proposed ADMT Framework, automated decision-making technology (ADMT) is defined as any technology that processes personal information and generates outputs that influence consequential decisions. This includes predictions, recommendations, and classifications. The new framework raises the standard for covered ADMT to be used in consequential decisions, requiring it to materially influence these decisions, unlike the previous “substantial factor” standard.
Type of Decisions in Scope
The type of consequential decisions that trigger obligations under the Proposed ADMT Framework remain largely consistent with those under the Colorado AI Act. However, there are notable changes, such as the removal of AI decisions related to the provision or denial of legal services. The framework clarifies that:
- Housing decisions involve leasing or purchasing residential real estate.
- Insurance decisions include underwriting, pricing, and claims adjudication.
- Essential government services involve public benefits and eligibility determinations.
Updated Obligations
The Proposed ADMT Framework eliminates certain obligations from the Colorado AI Act, such as:
- Reporting algorithmic discrimination risks to the Colorado Attorney General.
- Conducting AI impact assessments.
- Implementing a risk management policy.
However, it establishes different obligations for developers and deployers of Covered ADMT:
Developer Obligations
- Transparency: Provide technical documentation regarding the Covered ADMT, including intended uses and risks.
- Change notice: Inform the deployer of material updates to the Covered ADMT.
- Records: Maintain compliance records for a minimum of three years.
Deployer Obligations
- Transparency: Notify consumers when using Covered ADMT for consequential decisions and how they can obtain additional information.
- Adverse outcome notice: Inform consumers within 30 days if a Covered ADMT results in an adverse outcome.
- Records: Keep compliance records for at least three years.
Rulemaking and Enforcement
Similar to the Colorado AI Act, the Proposed ADMT Framework anticipates the Colorado Attorney General will adopt rules to clarify obligations under the law. Enforcement will not have a private right of action; the Attorney General will be responsible for enforcement actions, requiring written notice of violations and allowing a 90-day cure period.
In conclusion, the Proposed ADMT Framework aims to enhance transparency and consumer rights while streamlining obligations for developers and deployers of automated decision-making technology.
