Colorado Special Session to Consider Amendments to Landmark AI Law

The session was called by Gov. Jared Polis (D) earlier this month address an urgent budget shortfall he claimed was caused by the federal government’s passage of H.R. 1, better known as the Big Beautiful Bill. “Unlike Congress, which has made the federal deficit and debt worse, Colorado actually has to balance our budget,” he said in a news release. “We have a responsibility to deliver a balanced budget to Coloradans, so after careful consideration, I am calling the General Assembly to reconvene to find the best possible solution to the havoc H.R.1 has wreaked on Colorado’s budget.”

Among the steps being considered is “addressing the fiscal and implementation impact of SB24-205 (Consumer Protections for Artificial Intelligence) on consumers, businesses and the state and local government.”

Colorado passed the law in 2024 becoming the first state to enact a statute to regulate the use of AI across various sectors. At the time, however, Polis, Attorney General Phil Weiser, and Senate Majority Leader Robert Rodriguez acknowledged in a letter to AI stakeholders that the law needed “additional clarity” and “improvements” to ensure the final regulatory framework will “support Colorado’s leadership in the AI sector including through job growth, innovation and investment in Colorado’s technology sector.”

Polis named a task force to make recommendations for improvements in the law, and Rodriguez introduced a group of amendments based on those recommendations in the following legislative session. But the amendments bill failed in the Assembly amid disagreements between the technology and investment industries, and consumer and labor advocates.

“When the bill passed two Marches ago, the big criticism was that it was an incredibly business-friendly bill,” Troutman Pepper Locke Partner David Stauss told IAPP News. “After it passed, almost immediately, the startup tech community, the venture capital community, took the position that the bill was going to hurt innovation.”

Polis called this month’s special session the “last chance” for the parties to iron out their differences before the law goes into effect on February 1.

They don’t have much time to work with, however. The special legislative session is expected to last only three days. “I don’t know how we pass an AI bill in three days,” Rodriguez told the Colorado Sun, adding that negotiations over the summer had “stalled.”

The effort to reach a compromise also is playing out against a very different political landscape from when the law was passed. At the time, the Biden administration was keen to place guardrails around AI’s development and deployment and was generally sympathetic toward state efforts such as Colorado’s. The Trump administration and Republicans in Congress have sought to reverse course entirely, however. The Big Beautiful Bill originally included a provision barring states from enforcing AI regulations for 10 years, although the moratorium was dropped from the bill before final passage.

Since then, the administration has taken up the mantel. Trump’s AI Action Plan unveiled last month proposes denying certain federal funds to states with what it called “burdensome AI regulations” and directs federal agencies to “identify, revise, or repeal regulations, rules, memoranda, administrative orders, guidance documents, policy statements, and interagency agreements that unnecessarily hinder AI development or deployment.”