New Colorado AI Legislation Targeting Discrimination

 
Colorado’s new SB 24-205, signed into law by Governor Jared Polis on May 17, 2024, establishes stringent regulations aimed at safeguarding consumers from discriminatory practices associated with high-risk artificial intelligence (AI) systems.
This legislation, a pioneering effort in the United States, mandates that developers and deployers of such AI systems adhere to comprehensive reporting, disclosure, and compliance measures. SB 24-205 will take effect on February 1, 2026.
Key Highlights of SB 24-205:

Definition of High-Risk AI Systems: The bill targets AI systems that significantly influence consequential decisions in areas such as education, employment, healthcare, housing, and legal services.
Obligations on Developers and Deployers:

Developers (entities operating in Colorado that create or substantially modify any AI system) must exercise reasonable care to prevent discrimination risks. They must disclose to deployers the intended and harmful uses of their AI systems, detail data sources and governance measures, and provide necessary information for monitoring system outputs.
Developers must publicly disclose the types of high-risk AI systems they offer and outline their efforts to mitigate discrimination risks.
Developers must report known or foreseeable discrimination risks to the Colorado Attorney General.

Deployers (entities in Colorado using high-risk AI systems):

Deployers must implement risk management programs and conduct impact assessments regularly.
Consumers must be informed when AI systems are used for consequential decisions. If a decision adversely affects a consumer, the deployer must disclose the reasons, offer corrections for any inaccurate personal data used, provide an opportunity to appeal the decision, and allow for human review.
Deployers must prominently state on their websites the types of high-risk AI systems they deploy and how discrimination risks are managed.

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Exceptions: Small business deployers with fewer than 50 employees and those not using their own data to train AI systems may be exempt from certain requirements.
Enforcement: The Colorado Attorney General is tasked with enforcing SB 24-205, treating violations as unfair trade practices. The Attorney General has authority to issue rules and enforce penalties against developers and deployers failing to comply with the Act.

SB 24-205 sets a precedent in regulating AI technology to mitigate discrimination risks, ensuring transparency, and enhancing consumer protections in Colorado.
Source: reuters.com
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