The state senator who said Indiana should impose an Arizona-style crackdown on illegal immigration says a compromise includes the potential loss of state tax benefits for businesses hiring illegal immigrants.

Bill sponsor Republican Sen. Mike Delph of Carmel said Thursday the compromise version would also require businesses getting state contracts to use the federal government's employee verification program, E-Verify.

Delph says he believes such provisions would discourage illegal immigration to the state by making businesses more reluctant to hire them.

The House watered down the Senate-approved bill by removing provisions letting police officers ask people for proof they're in the country legally.

The House and Senate would have to approve the compromise during their final session day on Friday for it to advance to Gov. Mitch Daniels.