Estimated Time to Read: 6 minutes
While most states are busy trying to figure out how to regulate artificial intelligence (AI), including Texas, the state of Virginia is using AI to regulate smarter and, more importantly, to regulate less. In July 2025, Governor Glenn Youngkin (R) issued Executive Order 51, launching the nation’s first comprehensive AI-powered review of a state’s regulatory code.
The initiative doesn’t just aim to clean up red tape; it’s already delivering measurable results. In partnership with Vulcan Technologies, Virginia’s Office of Regulatory Management used thousands of AI agents to scan every regulation and guidance document in the Virginia Administrative Code. The AI flagged contradictions with statutory law, identified duplicative rules, and pinpointed where dense language could be simplified. The state reported a 26.8% reduction in regulatory requirements and a 47.9% cut in guidance document verbiage. The estimated annual savings? Over $1.2 billion, $700 million of which came from reforms to housing-related regulations alone.
Youngkin’s order didn’t stop at a one-time purge. Starting in 2026, every executive agency in Virginia is now required to use AI during its periodic four-year regulatory reviews. This means outdated, conflicting, or unnecessary rules will no longer sit untouched for decades. It’s a permanent shift toward a leaner, more legally sound, and more transparent regulatory state.
Before Virginia Acted, Texans Were Already Sounding the Alarm
Long before Executive Order 51, Texans were calling for the kind of reform Virginia just delivered. Texas Policy Research has previously outlined the sheer scale and impact of Texas’s overregulation. Despite its reputation as a business-friendly state, Texas ranked fifth nationally in total regulatory restrictions, with more than 274,000 rules on the books. Whole industries like waste management, utilities, manufacturing, and healthcare are subject to far more red tape in Texas than in most other states.
Occupational licensing remains one of the most problematic areas. Texas ranked last in the Cato Institute’s index for occupational freedom and regulates over a third of low-to-moderate-income jobs. The cost of compliance, both in time and dollars, shuts out working-class Texans, discourages entrepreneurship, and blocks workforce mobility.
Polling reinforces that Texans are ready for change. Ninety-four percent support plain-language rules, ninety-one percent want centralized access to all regulations, and nearly 90% believe all rules should undergo regular, independent review. Texans want reform, not in theory, but in practice.
The 89th Legislative Session: A Step Forward, But Not Yet a Leap
The 89th Legislature responded to some of these concerns. Senate Bill 14 created the Texas Regulatory Efficiency Office to review and reduce outdated or burdensome rules. House Bill 2818 established a new AI Division within the Department of Information Resources (DIR), tasked with using generative AI to modernize state systems. House Bill 3512 made AI literacy a requirement for public employees.
Yet for all this progress, Texas has not yet harnessed AI to directly streamline or repeal regulations, despite being fully capable of doing so.
In fact, while Virginia was pioneering AI-driven deregulation, Texas adopted House Bill 149, which moves in the opposite direction. Instead of deploying AI to audit and reduce government overreach, HB 149 imposes a new regulatory framework on AI developers and users. It creates the Texas Artificial Intelligence Council, sets biometric data standards, and outlines civil penalties and enforcement tools. Though scaled back from its original form, the bill still establishes new compliance burdens for private actors, particularly startups and open-source developers.
HB 149 aims to protect consumer rights and ensure responsible AI development—a valid concern. But it’s telling that Texas used its legislative bandwidth to regulate the use of AI rather than unleash it as a tool to fix its own bloated regulatory code. As a result, Texas is regulating AI outwardly, but not applying it inwardly where it could do the most good.
Texas Has the Tools, Now It Needs the Mission
What makes this all the more frustrating is that the policy architecture to follow Virginia’s lead is already in place. The Texas Regulatory Efficiency Office, created under SB 14, will have the authority to identify and recommend the repeal of unnecessary rules. The DIR’s newly established AI Division will have the technical capacity to build or deploy agentic AI tools, just like Virginia did. And HB 3512 will help prepare a public workforce with the baseline knowledge to work with these tools.
In other words, Texas doesn’t need to create new offices, pass sweeping new laws, or build out massive infrastructure. It simply needs to direct its existing resources toward the problem it already acknowledges exists: the unchecked growth and stagnation of the state’s regulatory code.
Governor Abbott (R) could issue an executive order, modeled after Virginia’s EO-51, directing the Regulatory Efficiency Office to partner with the DIR’s AI Division and launch a pilot audit of agency rules. Lawmakers could then follow up by amending SB 14 to formally require AI-powered audits during regular review cycles. And the process could be made fully transparent to the public through a dashboard showing which rules were flagged, which were repealed, and what cost savings were achieved.
This approach wouldn’t just complement HB 149—it would balance it. If Texas is serious about regulating AI responsibly, it should also be serious about using AI to regulate government more responsibly.
Conclusion: Texas Can Still Lead
Virginia has given Texas a blueprint, and the 89th Legislative Session gave Texas the tools. However, as of right now, our state risks being remembered as the one that regulated artificial intelligence before ever using it to fix its own overgrown bureaucracy.
The contrast is sharp. Virginia used AI to eliminate over a quarter of its regulatory burden and saved taxpayers billions. Texas used AI legislation to expand government oversight of the private sector and added millions in taxpayer costs, without deploying those tools internally.
The public is watching, and Texans are demanding clarity, simplicity, and accountability in governance, not more frameworks or commissions. They’re simply asking for results.
The choice is clear: Texas can continue talking about reform, or it can use the tools it already has to deliver it.
Let Virginia be the first. Let Texas be the best.
Texas Policy Research relies on the support of generous donors across Texas.
If you found this information helpful, please consider supporting our efforts! Thank you!
