The Senate Health and Provider Services Committee approved the amended bill 6-3, leaving the legislation a shell of its original version.
Only TANF applicants with drug convictions would be drug tested under the new version of the bill. Those who test positive would initially continue to receive money if they enter treatment. After four months of failed tests, benefits would be cut off for three months. To receive benefits again, applicants would have to test drug-free.
Ineligible parents who receive benefits for children could designate another adult to funnel the money to them.
The legislation also would prevent TANF users from buying products currently banned in the SNAP program, which includes alcohol and tobacco.
"There are people who are going to continue to oppose this, and that's fine," said Rep. Jud McMillin, R-Brookville, the bill's author. "This bill does do some things to try to get people help that need help, and I think that's an important step for us to take."
The legislation has been watered down numerous times after criticism that it unfairly targets the poor. Earlier this year, a House committee nixed a photo identification requirement for SNAP users, which has faced resistance from the U.S. Department of Agriculture.
Whether Indiana could have implemented the legislation before the recent changes is unclear. Efforts to restrict SNAP purchases and drug test recipients of the financial assistance program have faced challenges in other states and have been rejected by the federal government.
The Indiana chapter of the American Civil Liberties Union says the bill still is unconstitutional, even with the changes. Legal Director Ken Falk said previous convictions aren't enough to give probable cause for drug testing and could violate protections against unreasonable search and seizure.
"What was taken out was outrageously unconstitutional," Falk said of the previous versions of the bill. "But that doesn't mean that we're satisfied with what's left."
Analysts have not yet determined how much money the amended bill could cost the state. A report from the nonpartisan Legislative Services Agency estimates the state would have paid at least $1.18 million for the previous legislation.
Sen. Mike Young, R-Indianapolis, who sponsored the bill in the Senate, said the price tag for drug testing recipients at about $3 a person wouldn't cost the state more than $39,000. But fellow Indianapolis Republican Sen. Patricia Miller cautioned there still could be a substantial fiscal impact because of other costs associated with the program.
The bill now heads to the Senate Appropriations Committee for further review.