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Aug 22, 2025

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Charles Brennan serves as CCLP's Income and Housing Policy Director, using data and research to support our efforts to advance the rights of every Coloradan. Staff page ›

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Colorado AI Sunshine Act – Q&A with Charles Brennan

by , and | Aug 22, 2025

AI, Equity work, Legislative Updates, Research and Policy Analysis

AI with a young man behind the technology

The AI Sunshine Act (SB25B-004), introduced during Colorado’s 2025 special legislative session, would simplify the Artificial Intelligence (AI) regulations passed in SB24-205 last year to focus on increased transparency and accountability when an automated decision system is used as a substantial factor in making decisions in essential areas such as employment, health care, housing, and legal services. It ensures Coloradans know when a decision is made, what factors went into that decision, and provides them the right to correct any inaccurate data that may have been used. The bill also fundamentally shifts responsibility for any violations of Colorado’s consumer protections or civil rights laws onto both deployers and developers of AI technology, meaning Colorado’s businesses are not at fault for unknowingly deploying unreliable or biased systems that violate the law.

This bill has generated much debate at the Capitol and around the state. It’s also been the subject of many misunderstandings and not a little disinformation. We sat down with our colleague Charles Brennan, CCLP’s Income and Housing Policy Director to examine some of the claims made about the bill.

Question 1: Is the AI Sunshine Act too broad in its regulations of AI? Does it cover harmless tools like spell check, that do not run any risk of harming workers and consumers?

Charles Brennan: The bill does not regulate AI at all — it requires developers and deployers who use algorithmic decision systems in areas like employment, housing, healthcare, lending, and education to disclose the use of AI, but only if that system’s output is a substantial factor in the decision. Use of tools like databases, spreadsheets, spell check, calculators, or antivirus software are not covered. Nothing in the bill would affect the use of other AI-powered tools, such as notetakers (like Otter), budgeting (like Origin or Copilot), or task management apps (like Motion). The bill also requires disclosure to consumers when interacting with a generative AI system, but does not affect in any way how these systems function, how they are trained, or how they interact with consumers.

Q2: Is it even possible to regulate a technology that is so rapidly evolving?

CB: Again, disclosure is the goal of the bill, not regulation. The AI Sunshine Act would require disclosure by developers of automated decision systems to ensure deployers know how to use the system properly and are aware of any known or foreseeable risks that could cause the system to violate Colorado’s civil rights and consumer protection laws. The bill also requires deployers of algorithmic decision systems to inform Colorado consumers when an algorithmic decision system is being used to make a decision related to the provision, cost, or terms of education, employment, financial or lending services, essential government services, health-care services, housing, insurance or legal services. Consumers would also be informed of the types of data that were analyzed, up to 20 of the most important characteristics the system considered and gives consumers the right to correct any wrong information.

Q3: Will this bill stifle innovation and harm Colorado’s tech economy?

CB: Oversight and transparency can coexist with innovation — in fact, greater transparency can support technology innovation and adoption. Right now, with limited transparency, the public’s distrust of AI in decisions like hiring or lending is high. The bill’s provisions are meant to address some of the public’s concerns. There is strong public support for measures like informing people when a decision is made by AI and allowing them to correct any errors. Developer disclosures to AI deployers can also help them to make better AI purchasing choices, which in turn helps create a stronger, more robust market for AI products. Without readily available and accurate data, markets cannot allocate resources efficiently, leading to potential inefficiencies and market failures in Colorado’s growing AI industry.

Q4: Will small businesses and startups be crushed by the compliance costs of this bill?

CB: Although the disclosure requirements on developers and deployers apply to all businesses regardless of size, such disclosures are only required when an algorithmic decision system has a significant effect on decisions in a very narrow set of circumstances. There is a broader requirement that any AI developer or deployer notify consumers when they are interacting with generative AI systems, like ChatGPT. These requirements are not intended to place unnecessary burdens on business, regardless of their size; rather, these requirements attempt to give consumers the transparency they are looking for when interacting with AI or when it is used to make important decisions about them. The bill also makes AI developers jointly responsible with deployers when an algorithmic decision system leads to a violation of existing law, ensuring that Colorado businesses are not made responsible for the actions of powerful tech companies when unreliable or biased algorithms violate the law.

Q5: Do existing consumer protections and civil rights laws already protect workers and consumers, making this bill redundant?

CB: Unlike SB24-205, this bill does not create any new civil rights or consumer protections by preventing “algorithmic discrimination.” Instead, it requires disclosure of information so that deployers of algorithmic decision systems in Colorado can ensure their systems will not lead to violations of existing civil rights or consumer protections in our state. The bill is also clear that nothing it proposes would preempt or otherwise limit the rights of consumers to enforce their rights under existing laws.

Q6: Will the bill’s disclosure requirements force companies to reveal trade secrets or proprietary data?

CB: The bill clearly sets out what kind of information about an algorithmic decision system must be shared with AI deployers or with consumers, none of which would require the release of trade secrets. At most, AI deployers must provide consumers with the types and sources of the consumer’s personal data and up to 20 specific personal characteristics that were used to make a decision. AI developers and deployers are not required to disclose how that data was used, the data a system may have been trained on, or any other technical information about how the algorithm was built or developed.

Q7: Are proactive disclosure requirements really necessary?

CB: Proactive disclosures are commonly used across many sectors, from nutrition labels on food, to identifying paid promotional content, to home sale disclosures about asbestos and lead pipes.

The fact is, sometimes AI gets things wrong. AI can misinterpret input, carry unintentional biases into decision-making, or “hallucinate” information that sounds accurate but is invented in error. Without proactive disclosure, people may never know AI influenced a decision about them, and thus can’t challenge it. Creating this kind of transparency, so that consumers clearly know when AI is making a decision about them, is at the heart of the bill.

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HEALTH:
HEALTH FIRST COLORADO (MEDICAID)

Health First Colorado is the name given to Colorado’s Medicaid program. Medicaid provides public, low-cost health insurance to qualifying adults and children. It is an entitlement program funded by the federal, state, and county governments and is administered by counties in Colorado. Those who are required to pay must pay a small co-pay when receiving certain health care services.

State Department: Department of Health Care Policy and Financing

Eligibility: Most adults 18 to 64 are eligible for Medicaid in Colorado if their household income is at or below 133% of the federal poverty limit (FPL). Pregnant women are eligible with incomes of up to 195% FPL, while children under 18 may be eligible if the live in a household with income at or below 142% FPL. Some adults over 65 may also be eligible for Medicaid.

Program Benefits: Through Medicaid, low-income Coloradans are eligible for a range of health care services at little to not cost. Services provided include doctors visits, prescription drugs, mental health services, and dental care. Co-pays for certain individuals may be needed for certain services.

Program Funding and Access: Colorado funds our Medicaid program through state and federal dollars. Medicaid is an entitlement program, which means that all who are eligible for Medicaid can access the program, regardless of the funding level in a given year. This does not mean that it is always easy to access Medicaid, even when eligible. And since the program is administered by counties, funding levels for county staff and other administrative roles can make it easier or harder for Coloradans to access the program. On top of this, not all medical providers accept Medicaid which limits the ability of Coloradans to seek health services even if enrolled, such as if the nearest provider is a 2+ hour drive away.

Note: This data is from before the pandemic and does not reflect changes in enrollment rules during the COVID-19 pandemic and public health emergency.

Statewide Program Access 2015-19: Over the study period of this report, an average of 89.0% of the population at or below 133% of FPL (i.e., the population who is likely to be eligible for Medicaid) were enrolled in Medicaid in Colorado.

FOOD SECURITY:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP)

The Supplemental Nutrition Assistance Program or SNAP helps low-income Coloradans purchase food by providing individuals and families with a monthly cash benefit that can be used to buy certain foods. SNAP is an entitlement program that is funded by the federal and state governments and administered by counties in Colorado.

State Department: Department of Human Services

Eligibility: Currently, Coloradans qualify for SNAP if they have incomes below 200% FPL, are unemployed or work part-time or receive other forms of assistance such as TANF, among other eligibility criteria. Income eligibility for SNAP was different during the study period of this report than today—it was 130% FPL back in 2019 for example. The US Department of Agriculture uses the population at or below 125% FPL when calculating the Program Access Index (or PAI) for SNAP. We follow this practice in our analysis despite Colorado currently having a higher income eligibility threshold.

Program Benefits: SNAP participants receive a monthly SNAP benefit that is determined by the number of people in their household and their income. Benefit amounts decrease as income increases, helping households avoid a sudden loss of SNAP when their incomes increase, even by a minor amount. Benefits are provided to an Electronic Benefit Transfer (EBT) card that can be used to purchase eligible food items, such as fruits and vegetables; meat, poultry, and fish; dairy products; and breads and cereals. Other items, such as foods that are hot at their point of sale, are not allowable purchases under current SNAP rules.

Program Funding and Access: SNAP, like Medicaid, is a federal entitlement program. This means that Colorado must serve any Coloradan who is eligible for the program. As such, funding should not be a limit to how many Coloradans can be served by the program. However, funding for administration of SNAP at the state and county level can limit the ability of county human service departments to enroll those who are eligible. Other program rules and administrative barriers can make it difficult for Coloradans to receive the benefits they are legally entitled to receive.

Statewide Program Access 2015-19: Over the study period of this report, an average of 61.1% of the population at or below 125% of FPL (i.e., the population who is likely to be eligible for SNAP) were enrolled.

FOOD SECURITY:
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN (WIC)

The Special Supplemental Nutrition Program for Women, Infants, and Children, also know as WIC, provides healthcare and nutritional support to low-income Coloradans who are pregnant, recently pregnant, breastfeeding, and to children under 5 who are nutritionally at risk based on a nutrition assessment.

State Department: Department of Public Health and Environment

Eligibility: To participate in WIC you must be pregnant, pregnant in the last six months, breastfeeding a baby under 1 year of age, or a child under the age of 5. Coloradans do not need to be U.S. citizens to be eligible for WIC. In terms of income, households cannot have incomes that exceed 185% FPL. Families who are enrolled in SNAP, TANF, Food Distribution Program on Indian Reservations (FDPIR), or Medicaid are automatically eligible for WIC. Regardless of gender, any parents, foster parents, or caregivers are able to apply for and use WIC services for eligible children.

Program Benefits: WIC provides a range of services to young children and their parents. These include funds to purchase healthy, fresh foods; breastfeeding support; personalized nutrition education and shopping tips; and referrals to health care and other services participants may be eligible for.

Program Funding and Access: WIC is funded by the US Department of Agriculture. The state uses these federal funds to contract with local providers, known as WIC Clinics. In most cases, these are county public health agencies, but that is not the case in all Colorado counties. Some WIC Clinics cover multiple counties, while others are served by multiple clinics. Private non-profit providers are also eligible to be selected as a WIC Clinic.

Statewide Program Access 2015-17: Between 2015 and 2017, an average of 52.2% of the population eligible for WIC were enrolled in the program in Colorado.

Financial Security:
Colorado Works

Colorado Works is the name given to Colorado’s program for Temporary Assistance to Needy Families or TANF. It is an employment program that supports families with dependent children on their path to self-sufficiency. Participants can receive cash assistance, schooling, workforce development and skills training depending on the services available in their county.

State Department: Department of Human Services

Eligibility: In general, Coloradans are eligible to enroll in TANF if they are a resident of Colorado, have one or more children under the age of 18 or pregnant, and have very low or no income. For example, to be eligible to receive a basic cash assistance grant through TANF, a single-parent of one child could not earn more than $331 per month, with some exclusions—and would only receive $440 per month (as of 2022). That said, there are other services provided by counties through TANF that those with incomes as high as $75,000 may be eligible for. In addition to these, participants in TANF are required to work or be pursuing an eligible “work activity” or work-related activity. Any eligible individual can only receive assistance if they have not previously been enrolled in TANF for a cumulative amount of time of more than 60 months—this is a lifetime limit that does not reset. Counties may have additional requirements and offer benefits that are not available in other counties in Colorado.

Program Benefits:  While the exact benefits that one is eligible for under TANF can vary, all qualified participants are eligible to receive a monthly cash payment, call basic cash assistance. Other than cash assistance, counties are have a lot of choice in how to use their TANF funding; generally a use of TANF funds is appropriate so long as it advances one or more of the four purposes of the program: (1) provide assistance to needy families so that children can be cared for in their own homes or in the homes of their relatives; (2) end the dependence of needy families on government benefits by promoting job preparation, work, and marriage; (3) prevent and reduce the incidence of out-of-wedlock pregnancies; and (4) encourage the formation and maintenance of two-parent families.

It is important to note that those eligible for TANF are also eligible for many of the other programs we’ve included in this report, such as SNAP, Medicaid, and CCCAP.

Program Funding and Access: Colorado funds its TANF program through funds received from the federal government through the Temporary Assistance for Needy Families block grant. Most of the federal funds are allocated by the state to counties, which are required to provide a 20% match of state funding. Federal and state rules allow the state and counties to retain a portion of unspent funds in a TANF reserve.

Statewide Program Access 2015-19: Over the study period of this report, an average of 50.7% of the population at or below 100% of FPL (i.e., the population who is likely to be eligible for TANF) were enrolled in TANF in Colorado.

EARLY LEARNING:
COLORADO CHILD CARE ASSISTANCE PROGRAM (CCCAP)

The Colorado Child Care Assistance Program provides child care assistance to low-income families and caregivers living in Colorado in the form of reduced payments for child care. It is a program funded by the federal, state, and county governments and is administered by counties in Colorado. The share owed by parents/caregivers is determined on a sliding scale based on the family’s income.

State Department: Department of Early Childhood Education

Eligibility: Counties set eligibility for families separately, but must serve families with incomes at or below 185% of the Federal Poverty Limit. Families accepted to the program are no longer eligible once their income exceeds 85% of the state median income. Parents or caregivers must be employed, searching for work, or engaged in another approved activity to be eligible for CCCAP. Parents and caregivers enrolled in Colorado Works (Temporary Assistance to Needy Families or TANF) or in the child welfare system are also eligible to participate in CCCAP. Generally, CCCAP serves families with children under 13, although children as old as 19 may be eligible under certain circumstances.

Program Benefits: If a family is eligible for CCCAP and has income, they may likely have to pay a portion of their child’s or children’s child care costs each month. The amount that families owe is based on their gross income, number of household members, and the number of children in child care in the household. As such, households tend not to experience a benefit cliff with CCCAP when they see their incomes increase

Program Funding and Access: Colorado funds the CCCAP program using federal dollars it receives from the Child Care and Development Block Grant program. The state allocates federal and state funds to counties using a formula that takes into account factors like current caseloads and the number of eligible residents. Assistance is available until the county’s funds are spent, so the number of families that can be served is often a function of how much funding is available and the income and composition of the household that applies. It is not uncommon for counties to overspend or underspend their allocations of funds. The state reallocates unspent funds from counties who underspent to those who overspent. While underspending could indicate a problem with the way a county administers its CCCAP program, it could just as likely be a sign that there are few providers in the county who participate in CCCAP—or a lack of providers generally.

Statewide Program Access 2015-19: Over the study period of this report, an average of 10.8% of the population at or below 165% of FPL and younger than age 13 (i.e., the population who is likely to be eligible for CCCAP) were enrolled in CCCAP.

Housing:
HUD rental assistance programs

The US Department of Housing and Urban Development (HUD) has three housing assistance programs that we look at together: Housing Choice Vouchers (Section 8), Project-based Section 8, and Public Housing. In Colorado, these programs provided assistance to over 90% of the households who received federal housing assistance from all HUD programs. Through federally funded, local or regional public housing agencies (PHAs) are the agencies that administer these programs, through not all are available in all counties. These are not the only programs available in Colorado that assist households afford the cost of housing, such as units funded through federal and state tax credit programs.

State Department: Department of Local Affairs

Eligibility: Generally, households with incomes under 50% of the area median income (AMI) of the county they live in are eligible for these rental assistance programs, although PHAs have discretion to select households with incomes at higher percentages of AMI. That said, HUD requires that 75% of new vouchers issued through the Housing Choice Voucher/Section 8 program in a given year are targeted to households with incomes at or below 30% of AMI. PHAs are also able to create criteria that give priority to certain types of households who are on waiting lists for these programs.

Program Benefits: These rental assistance programs help households afford the cost of housing by reducing their housing costs to around 30% of their household income. In the case of the Housing Choice Voucher program, the PHA pays the voucher holder’s landlord the remaining portion of the rent.

Program Funding and Access: Funding and access are both challenges for these rental assistance programs. In addition to limitations on the number of public housing units or housing vouchers a PHA can manage or issue, lack of funding compared to the need constrains the ability of PHAs to assist low-income households. In 2020, Coloradans were on waitlists for Housing Choice Vouchers for an average of 17 months. Waitlists also exist for the other rental assistance programs.

Statewide Program Access 2015-19: Over the study period of this report, an average of 21.1% of renter households with incomes at or below 50% AMI (i.e., the population who is likely to be eligible for HUD rental assistance programs) were living in subsidized housing.