On January 31, the Colorado AI Impact Task Force met for a final time before presenting their report to the Joint Technology Committee and the Governor’s Office the following day. In the below article, we first provide a summary of the final hearing and then provide an overview of the report and recommendations.

Summary of Final Hearing

Throughout their hearings, members of the task force formed coalitions between two groups - the public interest groups and the technology industry groups. Unfortunately, the task force found little to agree on, but members were able to point out some areas where they think a consensus could eventually be reached. However, the ensuing discussions over these issues indicated that the division between the two groups still runs deep.

The hearing started off with a brief debate over consequential decisions and substantial factors, which involved some task force members arguing for an expanded definition while others wanted to narrow it. Things got more heated when members discussed the small business exemption. Some argued that the exemption should be expanded to developers, while others warned that this could undermine accountability. One task force member chimed in and offered an alternative to the small business exemption in which nobody is exempt, and proposed a tier system for applying certain requirements to companies of different sizes. Committee Vice Chair Representative Titone indicated her belief that the size of a company does not matter, and that the real focus should be on the size of a company’s impact. She highlighted the example of the company Pied Piper, the fictional company in the TV show Silicon Valley. While the company is a small startup, it has a massive impact on millions of users, and companies like that need to be regulated, according to the Representative.

Leading members of the task force also pointed out areas where they do not believe a consensus could be reached in the committee, mainly trade secrets and disclosure requirements. Small business and technology industry advocates argued that requiring AI companies to disclose how their systems work could expose proprietary information to their competitors and foreign adversaries, with concerns raised about China’s AI advancements with DeepSeek. Supporters of the disclosure requirements from public interest groups countered that these requirements are not intended to release secrets to competitors, rather they are qualified transparencies to ensure that the company is in compliance with the law and is not engaged in discrimination. Other points of contention included defining algorithmic discrimination, the timing and requirements of impact assessments, and the role of the Attorney General in enforcing transparency measures.

While the task force will no longer hold hearings, committee chair and SB 205 author Senator Rodriguez assured members that discussions over the bill would still continue and that the bill would eventually be amended.

Report and Recommendations

The task force’s Report and Recommendations identifies four categories of proposed changes: (1) areas of apparent consensus; (2) areas where consensus appears achievable; (3) areas where consensus likely depends on whether and how to implement changes to multiple interconnected sections; and (4) areas with firm disagreement.

The areas of apparent consensus are few. Specifically, the report states that there are a “handful of relatively minor proposed changes . . . for which there appears to be consensus.” However, the report does not identify those areas.

Some of the areas where consensus appears achievable include more specifically defining the types of decisions that qualify as consequential decisions, reworking the list of exemptions to the definition of covered decision systems, and changes to the law’s documentation and impact assessment requirements.

Areas that were identified as requiring broader compromises include making changes to the law’s definitions of “algorithmic discrimination” and “intentional and substantial modification.”

Finally, areas identified as having “firm disagreement” among stakeholders include the definition of “substantial factor,” the definition and mechanics of the duty of care (and whether to even include that concept), the treatment of small businesses, trade secret exemptions, the right to appeal, and the scope of attorney general rulemaking.