On AI, Legislators Seek a Balance Between Innovation, Regulation

In an effort to regulate artificial intelligence and generative artificial intelligence, lawmakers in three states have introduced or passed new legislation that, generally, puts the onus on companies that create AI to prevent its discriminatory use.

In Colorado, elected officials are considering state Senate Bill 205, which requires a developer of “high-risk artificial intelligence systems” to use reasonable care to avoid algorithmic discrimination. It requires developers to provide detailed disclosures and the necessary documentation for impact assessments, and to publicly summarize the types of high-risk systems they offer, along with their risk management strategies. Any known or foreseeable risk of algorithmic discrimination must be promptly disclosed to the state attorney general and to those deploying the technology.

The bill mandates that business owners using AI must inform users about their interactions with the technology to prevent bias in hiring, housing and health-care decisions.

In response to the legislation, more than 100 business owners around the state signed a letter to Colorado Senate Majority Leader Robert Rodriguez, D-Denver, who sponsored the bill, outlining their major concerns. The business owners acknowledged the need to mitigate the potential harms of AI but said the bill’s approach was “fundamentally flawed” and that many portions of the bill are “misaligned with technological reality and legal precedent.” If this bill becomes law, the letter said, it would “severely stifle innovation and impose untenable burdens on Colorado’s businesses, particularly startups.”

The bill cleared the state Senate Judiciary Committee April 24. The following day, Rodriguez told The Colorado Sun the bill has “always been about providing a framework for accountability, for biases and discrimination and just making sure that people know when they’re interacting with it.”

In Connecticut, the state Senate has approved similar legislation. Connecticut’s AI bill, SB 2, says that beginning Feb. 1, 2026, developers of “high-risk AI systems” must provide detailed information to users about their systems, including intended uses, data sources, limitations, evaluation processes and mitigation measures to prevent algorithmic discrimination. Developers must also assist users in understanding and monitoring AI system outputs, and — much like the Colorado Senate bill — must publicly disclose the types of high-risk AI systems they offer and how they intend to thwart bias and discrimination.

Opponents echo concerns raised by critics of the Colorado bill, arguing that the proposed legislation could pose compliance challenges and hinder business innovation. Despite these objections, state Senators approved the bill April 24 after a nearly four-and-a-half-hour debate, with a 24-12 vote. It must next clear the state House of Representatives.

In contrast to the Colorado bill, Connecticut state Sen. James Maroney, D-Milford, sponsor of SB 2, said the legislation largely exempts health care from its provisions. Instead, the legislation targets potential AI discrimination based on age, religion, gender identification, religion and other protected classes impacted in housing, education, finance, employment, criminal justice, education, government jobs and insurance coverage.

Florida has joined the AI regulatory conversation as well, with Gov. Ron DeSantis signing into law House Bill 919, imposing regulations on political ads that use generative AI. The bill defines GenAI as a “machine-based system” capable of emulating input data to create synthetic content, including images, videos, audio and text.

The bill requires that video ads using GenAI have a clear, readable disclosure message occupying at least 4 percent of the television screen space and an audio disclosure lasting 3 seconds. Starting July 1, violators may be charged with a first-degree misdemeanor.

DeSantis also signed a bill establishing a regulatory council to oversee and guide the state’s overall technological landscape last week. SB 1680 creates a Government Technology Modernization Council within the Department of Management Services “to study and monitor the development and deployment of new technologies and provide reports on recommendations for procurement and regulation of such systems to the governor.” SB 1680 takes effect July 1.