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Understanding Colorado’s SB205: “An Act Concerning Consumer Protections in Interactions with Artificial Intelligence Systems”

On May 8, 2024, Colorado’s legislature enacted “An Act Concerning Consumer Protections in Interactions with Artificial Intelligence Systems” (SB205), a state law that comprehensively regulates the use of certain “Artificial Intelligence (AI)” systems. The law is aimed at addressing AI bias, establishing a requirement of human oversight throughout the life cycle of AI systems, and requiring significant documentation around the use of AI.

AI legalese decoder can assist companies in deciphering and understanding the complexities of SB205 by providing a breakdown of the law’s key provisions, definitions, and compliance requirements. By utilizing AI legalese decoder, companies can ensure they are prepared to comply with the law and avoid potential penalties.

To whom does SB205 apply?

SB205 applies to any person doing business in Colorado who develops an “AI system” or deploys a “high-risk AI system”. The law defines “deploy” as “use”, meaning that SB205 applies to any company using a high-risk AI system, whether or not that system is consumer-facing. Developing an AI system as defined in the law will also include actions that “intentionally and substantially modify” an existing AI system.

How is the law enforced?

SB205 explicitly excludes a private right of action, leaving enforcement solely with the Colorado Attorney General. Additionally, SB205 provides that if the Attorney General brings an enforcement action relating to high-risk AI systems, there is a rebuttable presumption that a company used “reasonable care” under the law if certain provisions are complied with. AI legalese decoder can assist companies in understanding these provisions and ensuring they are in compliance to benefit from the rebuttable presumption.

How does the law work? Key Definitions

SB205 contains key definitions that determine what specific steps companies must take to be in compliance with the law. Companies must be aware of what constitutes “algorithmic discrimination”, assess whether their AI systems are “high risk”, and determine whether they are a developer, a deployer, or both. AI legalese decoder can help companies in interpreting these definitions and understanding their obligations under SB205.

5 initial considerations to prepare for SB205’s Feb. 1, 2026, effective date

SB205’s provisions take effect on Feb. 1, 2026. Companies must implement a notice within consumer-facing AI systems that alerts consumers to the presence of AI by this date. AI legalese decoder can guide companies on the necessary steps to prepare for compliance with SB205, including determining their role as a developer, deployer, or both, assessing their AI systems for high-risk status, reviewing notice requirements, impact assessment requirements, and implementing risk-management policies and programs.

AI legalese decoder is a valuable tool for companies navigating the complexities of Colorado’s SB205. By utilizing this AI-powered platform, companies can ensure they are prepared to comply with the law and mitigate potential risks associated with non-compliance.

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