Virginia Leverages AI to Uncover Illegal and Redundant Rules

Virginia's Groundbreaking Use of AI in Regulatory Review

Virginia Governor Glenn Youngkin (R) has taken a significant step toward modernizing the state’s regulatory framework by signing Executive Order 51 earlier this month. This initiative marks the first of its kind in the United States, as it introduces a statewide regulatory review system powered by artificial intelligence (AI). The goal is to streamline and simplify the state’s regulatory environment, making it more efficient and less burdensome for businesses and citizens alike.

The governor’s office announced that AI will be used to scan all remaining regulations found in the Virginia Administrative Code and the Virginia Register of Regulations. The AI system will be tasked with identifying any areas where regulations contradict existing statutes, flagging redundancies, and highlighting opportunities for simplification. This effort aligns with Youngkin’s broader vision of improving government efficiency and reducing unnecessary regulatory hurdles since he took office in January 2022.

One of his early priorities was outlined in Executive Directive Number One, which directed all executive branch entities under his authority to initiate regulatory processes aimed at reducing the number of non-mandatory regulations by at least 25 percent. To support this initiative, Youngkin established the Office of Regulatory Management (ORM) in June 2022. This office was created to oversee the regulatory reform process and ensure that the state’s rules are both effective and necessary.

In July 2023, the governor’s office announced that it had successfully met the 25 percent reduction target. Through a series of approved changes, the state managed to streamline over 26.8% of its regulatory requirements, resulting in annual savings of more than $1.2 billion for Virginia citizens. According to Peter Finocchio, Youngkin’s press secretary, the savings were calculated based on input from each agency, which estimated the financial benefits of the regulatory changes they implemented.

A significant portion of these savings—$700 million—was attributed to the Department of Housing and Community Development. This department’s regulatory changes helped reduce the construction cost of a new house by approximately $24,000. These figures highlight the tangible impact of regulatory reform on everyday Virginians.

Youngkin emphasized that his administration is on track to achieve a 33 percent reduction in regulations by thoroughly examining every rule, requirement, and process that adds unnecessary costs to business activities. Executive Order 51 plays a key role in this effort by leveraging AI to scan through all regulations and guidance documents to identify areas for streamlining.

The order requires all executive agencies to respond to the regulatory reduction report produced by the ORM. This report is generated with the help of third-party, AI-generated analysis of all regulations and guidance documents issued by the Commonwealth’s executive branch agencies. The third-party involved in this initiative is Vulcan Technologies, a Y Combinator-backed AI regulatory review company founded in December 2024. The ORM contracted with Vulcan Technologies in April to conduct its AI Regulatory Reduction Pilot.

Tanner Jones, CEO of Vulcan Technologies, shared insights about the pilot trial, which lasted three months from May 1 to August 1. Jones explained that the company used thousands of AI agents to review regulatory provisions and compare them against the entire body of federal and state statutory and case law. This process helped determine which regulations were statutorily mandated and which fell outside their scope. According to Jones, the tool is neutral, acting as an “administrative lawyer in a box” that identifies the legal basis for each regulation and assesses whether that authorization is still valid.

Jonathan Wolfson, senior advisor to Vulcan Technologies and former Labor Department Regulatory Reform Officer during President Trump’s first administration, noted that prior to the AI pilot program, Virginia reviewed its regulatory code line by line. Jones acknowledged that this manual approach was the gold standard but added that Vulcan Technologies is introducing a new standard with its agentic AI regulatory review software.

Executive Order 51 also mandates that each agency use AI to evaluate the extent to which its regulations are statutorily sanctioned, whether they are redundant or conflicting with other statutes, how similar they are to regulations in neighboring states, and how they can be streamlined to eliminate excessive language while achieving the same goals. These requirements apply to all periodic regulatory reviews mandated by the Virginia Administrative Process Act after December 31, 2025.

While many states are focused on regulating AI, Virginia is using it to remove outdated and unnecessary regulations. The sheer volume of Virginia’s regulatory text—24 million words—makes manual review impractical. By adopting agentic AI, Virginia is setting a new precedent for regulatory efficiency and transparency.