The House family and children committee voted 9-4 along party lines to send the proposal to the full Republican-controlled House.
Rep. Jud McMillin, R-Brookville, said his proposal is aimed at helping those with drug abuse problems and improving the home environment for children. The results of the drug test couldn't be used for a criminal investigation, although child welfare authorities would be notified, he said.
"This isn't a gotcha bill," McMillin said. "This isn't punitive, this isn't trying to hurt people. We're trying to help people."
Democrats on the committee and some others questioned whether enough affordable drug treatment programs were available.
Many drug abusers need intensive detoxification programs that can have long-term costs of perhaps $10,000, with free programs often much less effective, said Mark Fairchild, executive director of the National Association of Social Workers' Indiana chapter.
"Simply giving them a list of options that are available will not work," Fairchild said. "Those high-intensity options that are needed are in very short supply across Indiana — private pay, Medicaid or otherwise. Simply getting admitted into those can take well in excess of 30 days."
McMillin proposed a welfare drug testing plan last year that stalled in the Senate after concerns were raised about the possible $1 million cost for the state's Family and Social Services Administration to start the program. That proposal would have required testing of recipients for whom agency officials had reasonable suspicion of drug use and random testing for other recipients.
McMillin said a major change this year is that those failing drug tests could still receive benefit payments if they entered a treatment program and passed follow-up tests.
"If they don't get clean, then they lose their benefits," he said.
The maximum benefit payment from Indiana's TANF program for a family of four is $346 a month, according to state figures.
The nonpartisan Legislative Services Agency estimates it would cost about $1.1 million to start the testing program, although McMillin said he believed much of that would go for initial expenses and be less in later years. McMillin said federal laws won't allow drug testing for those receiving food stamps and Medicaid.
House Democrats last year successfully pushed to add to the bill a provision requiring legislators to submit to drug tests before receiving perks like parking spots and laptops, arguing that Indiana's poor should not be the lone targets of drug testing.